"We think at least 250,000 to 350,000 barrels of Iranian crude (a day) could be at risk of disruption if sanctions are brought back into place," Ehsan Khoman, head of research and a strategist at financial group MUFG, told CNBC's Capital Connection on Thursday.
"In terms of the upside risk to oil prices, we think that anything north of $80 for Brent crude and WTI above $75 could firmly take place. We think markets have not fully priced-in the size and magnitude of Iranian sanctions," he said.
Brent futures are currently trading around $74, while U.S. West Texas Intermediate (WTI) is fetching $68 a barrel. Oil prices have risen in recent months following a prolonged period of low prices caused by a global glut in supply.
While the major group of oil producing countries — including OPEC and other non-OPEC producers such as Russia — have held back supply in order to reign in supply, geopolitical events could unsettle that fine balance.
The latest figures from OPEC, for March, indicated that Iran produced around 3.8 million barrels of oil per day, making it the third largest oil producer in the 14-member group, after Saudi Arabia and Iraq.
A possible collapse of Iran's nuclear deal could lead the U.S. to re-impose sanctions on Iran. That would sorely affect Iran's oil-exporting industry and production, and could unsettle a balancing act that has stabilized prices.
President Donald Trump is due to decide on May 12 whether he will scrap a deal brokered by the United States, Russia, France, Germany and the U.K. — a deal which Trump has called "terrible."
"High geopolitical tensions between the U.S. and Iran certainly don't bode well for oil markets. Our base-case scenario is that Donald Trump will not sign the nuclear waiver agreement on May 12," Khoman said. "He has been articulating that in tweeting policy and through other statements."
Khoman said Trump's "hawkish" circle of advisors — with Iran critics including Mike Pompeo (Trump's nominee for secretary of state) and John Bolton (Trump's national security advisor) — makes it likely that the U.S. will choose to re-impose sanctions on Iran.
"Of course, we've had the French president there trying to reason with Trump and to see if they can come to some kind of new deal," he said. "And then German Chancellor Angela Merkel is going to Washington if she can do something to get Trump back to some kind of accomodative stance over Iran."