Bill Richardson, former New Mexico governor and U.S. Energy Secretary under President Bill Clinton, said Monday he expects the return of Iranian oil to push prices lower in the near term, perhaps to the low $20s. But once the flow of Iranian crude stabilizes, he sees the cost of crude rebounding to $40 or $50.
"The commodity of oil is going to continue to boom and bust, but eventually it's going to recover," he told "Squawk Box."
They key factor to watch is whether top oil exporter Saudi Arabia agrees to a productions cut, he said. That outcome is unlikely even if OPEC calls an emergency meeting because the Saudis don't want to help their regional rival, Iran, by supporting prices right as Tehran returns to international oil markets.
Saudi Arabia has spearheaded OPEC's policy of maintaining current high levels of production for more than a year in order to pressure producers with higher costs, such as the United States and Russia, and to maintain market share.
That policy has indeed turned up the heat on U.S. production and exploration companies that rely on an expensive drilling method known as hydraulic fracturing, or fracking. These frackers have built up a large inventory of drilled but uncompleted wells that can be brought online once prices rebound.
That has raised concerns about a prolonged cycle of spiking and falling crude prices.
"It's going to be maybe quite a while before we see high prices given the fracking revolution. I think you're going to see huge amounts of oil come on stream quite quickly if the price gets to $50 or $60," former Clinton Treasury Secretary Larry Summers told "Squawk Box."\
There could always be a geopolitical surprise that could cause crude to spike temporarily, Summers said. "But] we're importantly in a new world."