In his view, tensions in the Middle East show no signs of easing, and the current conflict between Israel and Hamas could bring greater disruptions to the oil market. McNally stressed that the risk of a geopolitical event hitting oil supplies is now at least 30 percent.

In response to Israel's actions in the Gaza Strip, Iran-backed Houthi forces have attacked shipping vessels in the Red Sea over the past month, which has temporarily pushed up oil prices.

Although a US-led maritime task force moved into the region after frequent attacks on ships in the Red Sea, Iran also subsequently sent a warship into the Red Sea to counterbalance the US escort coalition. Last week, the US accused Iran of attacking an Indian Ocean oil tanker with a drone, in a fresh sign of the spread of the Israeli-Palestinian conflict.

On Wednesday, the United States and more than a dozen other countries warned Iran-backed Houthi rebels in Yemen not to continue attacking ships in the Red Sea. "If the Houthis continue to threaten lives, the global economy and the free flow of commerce in the region's critical waterways, they will face the consequences," the governments said in a joint statement.

The United States and its Allies are considering a military strike against the Houthis in Yemen, recognizing that a maritime task force may not be enough to eliminate the Red Sea threat, people familiar with the matter said.

Oil prices could rise another 15%

"The situation has not eased. I think the market is too complacent, "McNally said. "I think geopolitical risk will add at least another $12 to oil prices."

On Wednesday, international oil prices closed up more than 3% on the back of a terrorist attack in Iran, warnings against the Houthis and a show of unity by OPEC.

With Brent crude, the international benchmark, now close to $78 a barrel, that means prices could rise to $90 a barrel, a gain of about 15 per cent.

McNally added that if Iran increased its attacks on waterways in the Red Sea region, it would pose a greater threat than it has so far. This is especially true if Iran targets ships passing through the Strait of Hormuz. The Strait of Hormuz is the only waterway connecting the Persian Gulf to the rest of the world.

He noted that "the Red Sea is a shortcut," while "the Strait of Hormuz is a bottleneck," and that a strike on the latter would be tantamount to a "heart attack."

In addition to Iran, McNally worries about the conflict between Lebanon, Israel and Hezbollah.