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Tension between the U.S. and Iran is ratcheting up. Over the weekend, Iran warned the United States that U.S. regional military bases would be at risk should further sanctions be imposed.

This could be a watershed moment for oil prices. Iran has added 1 million barrels of oil per day since sanctions were lifted as part of the Iran nuclear deal negotiated during the Obama administration. If the U.S. imposes further sanctions on Iran, “I think you’re going to see oil prices rise considerably,” warns Energy Policy analyst Joe McMonigle in the video above from a recent institutional conference call.

McMonigle also explains that European companies would have to comply with some form of U.S. sanctions, despite policymakers’ on the Continent stating their opposition to further action against the Iranian government. Companies like France’s Total and the U.K.’s BP have significant exposure to the U.S. so maneuvering around sanctions to operate within Iran will be increasingly difficult.

A decision about further sanctions could be imminent. President Trump has been a long-time opponent of the Iranian nuclear deal, calling it the “worst deal ever” and an “embarrassment to the United States.” In line with Hedgeye's forecasts, the Washington Post reported this weekend that President Trump plans to decertify the Iran nuclear deal as early as this week. According to the Post and other media outlets, the President will give a speech this Thursday, October 12 to outline the case for the US pulling out of the Iran deal.

Watch the video above for more.

‘Oil Prices Could Rise Considerably’ If U.S. Imposes New Sanctions on Iran - etf pro