Johannes Benigni, chairman of JBC Energy, made the comments on CNBC's "Capital Connection" amid continuing unrest in Iran. Demonstrations erupted on Saturday and have continued for three days since, following the government's announcement that its military was responsible for shooting down a Ukrainian passenger plane.
Protesters reportedly chanted slogans including "they are lying that our enemy is America, our enemy is right here," outside a university in Tehran.
Former President Barack Obama's national security advisor on Sunday said Iran is closer "than ever before" to a possible collapse in the regime.
"So you take the removal of (top Iranian commander Qasem Soleimani), you take the accidental downing of the civilian aircraft coupled with the amount of popular unrest — the needle towards possible collapse of a regime has to be something that people think about," General James Jones told CNBC's Hadley Gamble. "It's probably not politically correct to talk about it, but you have to think about it."
JBC Energy's Benigni said a change in leadership in Tehran would have a major impact on energy prices.
"For the oil market, it would mean that the likelihood of oil prices dropping towards $40 is very high," he said on Tuesday.
Brent crude traded around $64.23 on Tuesday afternoon in Asia.
"Remember Iran could easily add 1.5 million barrels within a shortest period of time. Maybe even 2 million barrels, and that's a lot of oil," he said.
On a larger scale, he said there isn't much upside potential for Brent crude. "Bear in mind we have right now 6 million barrels of oil on the sidelines, 2 million of which coming from Iran."
"If you have more pressure on Iran, you may reduce maybe 100, 200 thousand barrels going to China, but it's not giving you much more upside potential. It's only military confrontation that could do that," he said.
— Reuters and CNBC's Natasha Turak, Amanda Macias and Joanna Tan contributed to this report