U.S. sanctions on Iran's energy industry, when they come into effect in November, could potentially drive oil prices above $100 per barrel, according to an industry expert.
U.S. West Texas Intermediate crude oil futures traded at about $68 per barrel on Tuesday, while Brent crude futures sat at nearly $78.
"If there was not that set of sanctions, I think prices would go to $70 or even a little bit lower. But now the sanctions threat is real and less than two months in front of us, that will transform the market into much higher prices," Fereidun Fesharaki, founder and chairman of consultancy FACTS Global Energy, told CNBC's Akiko Fujita at the CLSA Investors' Forum in Hong Kong.
"The higher price will only be blamed on the Trump administration. There's not much anybody can do if the sanctions come in and are enforced properly," he said on Tuesday.
U.S. President Donald Trump's decision to withdraw from an international agreement to curb Iran's nuclear program has resulted in a round of sanctions being re-imposed on the country's financial, automotive, aviation and metals sectors. The U.S. State Departmenthas set Nov. 4 as a deadline for Iranian oil buyers to completely cut their purchases to avoid American sanctions.
Iran is currently one of the largest oil exporters in the world. Cutting off Iranian supplies entirely would push oil prices above $100 per barrel because other major producers could not easily fill the void, said Fesharaki.
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