There’s a good deal of uncertainty with oil prices.

Crude futures tumbled as the global community awaits next moves from OPEC as U.S. waivers expire, and record U.S. production weigh on prices.

For one, the U.S. government just reported a nearly 10 million-barrel rise in domestic crude supplies – the biggest weekly climb of the year.  At the same time, crude production in the States was up 100,000 barrels to a record 12.3 million barrels a day.

“With the possibility of increasing pressure on OPEC to meet oil demand, it remains to be seen how much longer members and partners will be able to continue to maintain supply cuts,” said Mihir Kapadia, chief executive officer of Sun Global Investments, as quoted by Market Watch. “Investors will be watching developments closely, particularly with the expiration of sanctions waivers for nations that have been allowed until now to continue buying oil from Iran.”

Two, the U.S. just tightened sanctions on Iran

All in an effort to cut Iran’s exports to zero, which could usher in new uncertainty with oil.  The sudden moves to choke Iranian exports could wipe out a million barrels a day, or about 1% of global consumption.  To fill that gap, the U.S. has turned to Saudi Arabia.

Unfortunately, the Saudis have not made a firm commitment to do so yet.

“President Trump’s decision to zero out waivers for importers of Iranian oil on May 2 represents an audacious act of oil brinkmanship as the strategy of keeping prices contained now rests almost exclusively on Saudi Arabia’s willingness to open the taps amid accelerating global supply outages,” Helima Croft, global head of commodity strategy at RBC Capital Markets said, as quoted by CNBC.

The White House has also made it clear that it’s determined to sustain and expand economic pressure against Iran to hopefully end its threats against the U.S., partners, and allies.

U.S. special representative for Iran has noted that Trump is trying to get a “new and better deal with the Iranians… but it needs to be comprehensive, it needs to include all of the threats that Iran presents to regional peace and security, and the nuclear piece is the most significant,” as quoted by the Atlantic Council.

We must also consider that tighter sanctions may not cause a supply shock

However, it does make the oil market much more vulnerable to potential shortages, near-term.  In fact, at the moment, some analysts believe the market is slightly under supplied.

At the same time, supply disruptions and outages are still a daily occurrence.

U.S. sanctions on Venezuela for example has accelerated a plunge in that country’s output.  In Libya, conflicts have put the OPEC country’s supply at risk, too. Even in Europe, we’re seeing disruptions in supply to refineries.

As always, it’s a wait-and-see with what happens next in the oil trading pits.