Negotiations that could lead to sanctions relief for Iran could also be bearish for oil prices over the next 18 months, said Francisco Blanch, head of global commodities and derivatives research at Bank of America Merrill Lynch Global Research.
"It's important to keep in mind that oil trades a month and a half ahead, so if the sanctions are lifted in three months or in four months, oil is going to start pricing that up pretty soon," he said Monday on CNBC's "Squawk on the Street." "We could start to see the pressure building as soon as Congress and the Senate give [President Barack] Obama greater backing on the Iran deal."
Blanch said he is looking to see what will happen to the 30 million-plus barrels of oil that Iran has floating offshore now that could be delivered to the market relatively quickly if the sanctions are lifted.
"The second thing is how much are Iranian volumes going to ramp up on a forward basis as domestic production increases again," he added.
Blanch also said that OPEC has ceased to operate as a cartel and has "very little ability anymore to influence prices." That is because Saudi Arabia has told that market that it will let prices balance supply and demand, rather than adjust production volume as it did in the past.