Oil prices could rise towards US$100 (RM413) per barrel by 2019 as U.S. sanctions against Iran tighten markets, commodity merchants Trafigura and Mercuria said on Monday at the annual Asia Pacific Petroleum Conference (Appec) in Singapore. "They got prices higher and they are going to get them higher still".
The threats of disruption as well as the early supply cuts have helped to lift Brent crude futures to almost $80 a barrel this month, a level not seen since 2014.
Sunday's meeting in Algiers brought together OPEC oil ministers and non-OPEC signatories to the 2016 agreement as they seek to extend their cooperation.
The situation may worsen in the months following November, when the administration of President Donald Trump imposes sanctions on all Iranian exports.
In its latest forecast on the global oil landscape, the Organization of the Petroleum Exporting Countries said it expects US shale growth to "slow significantly" after 2023, before peaking at 14.3 million barrels a day between 2027 and 2028.
One problem is the uncertainty over how much oil will be lost when the USA -led sanctions against Iran begin in November.More news: CDC Report: Impact Of Alzheimer's Disease Will Double By 2060
Add to this the loss of Venezuelan oil because of mounting economic and political problems, and ongoing conflict-related disruptions in Libya, and suddenly the market doesn't look that well-supplied any more.
The market has looked to softening demand from trade tensions between the USA and China to offset the production cuts from Iran.
While it's possible that refiners around the world will be able to juggle their supplies to work around the politically-created disruptions, this is likely to come at a cost. Bank of America Merrill Lynch joined JPMorgan Chase & Co.in anticipating higher prices down the line - the former expects crude to reach US$95 a barrel in the first half of next year.
Washington has already implemented financial sanctions against Iran and it plans to target the country's oil exports from November 4, putting pressure on other countries to also cut Iranian crude imports.
Looking at prices that more closely track Iranian crude, such as Oman futures on the Dubai Mercantile Exchange and physical Dubai swaps, and some interesting trends emerge.
On Sunday, the OPEC/non-OPEC Joint OPEC-non-OPEC Ministerial Monitoring Committee (JMMC) met in Algeria and said that "despite growing uncertainties surrounding market fundamentals, including the economy, demand and supply, the participating producing countries of the DoC continue to seek a balanced and sustainably stable global oil market, serving the interests of consumers, producers, the industry and the global economy at large".