Daniel Jaeggi, the president of the commodity merchant Mercuria Energy Trading, said that because of the USA sanctions against Iran, millions of barrels per day (bpd) of crude oil could be taken out of the market by the end of the fourth quarter this year, making oil prices spike up to $100 a barrel.
A pumpjack brings oil to the surface in the Monterey Shale, California, U.S., April 29, 2013.
Global benchmark Brent fell 37 cents to $81.50 a barrel by 10:57 a.m. EDT (1457 GMT).
Brent crude prices rose to a almost four-year high above above $82 a barrel on Tuesday after OPEC and its allies said they would stick to the plan they agreed to in June.
The aggressive deadline has left the market to wonder whether top exporter Saudi Arabia and other producers can fill the gap left by the anticipated loss of about 1 million barrels a day in the coming months.
At the same time, the demand worldwide is reaching 100 million barrels per day for the first time in history.
Mattis to Iran: Don't Even Think About Taking Us On
Iranian President Hassan Rouhani also claimed that USA backed states in the Persian Gulf were responsible for the assault. Helima Croft of RBC Capital Markets said the attack could "exacerbate" the situation in the Middle East, CNBC reported.
The coalition of roughly two dozen exporters has been limiting its output since January 2017 in order to end a punishing oil price downturn that bankrupted hundreds of American oil companies and heaped financial pressure on crude-producing nations. "However, overall the market remains supported as sanctions on Iranian exports take hold".
Earlier on Monday, Oil prices rose by nearly 2 percent as the USA sanctions restricted Iranian crude exports, which helped tighten the total global supply.
But he did concede that Seoul hasn't bought any Iranian oil "for three continuous months".
Ben Luckock, who is the co-head of oil trading at fellow merchant Trafigura also said that crude oil prices could hike up to $90 per barrel by Christmas and $100 by the start of New Year as the markets tighten.
Iran is the third biggest producer of oil in the Organization of the Petroleum Exporting Countries (OPEC).
"If he wants the price of oil not to go up and the market not to get destabilised, he should stop unwarranted and disruptive interference in the Middle East and not be an obstacle to the production and export of Iran's oil". While some, such as Citi's Ed Morse, suggests that an SPR sale could "knock a couple of bucks off the oil price", others, such as Hess Corp's Greg Hill are skeptical: "It won't drop oil from $80 to $65, and any effect would be short-term".