Brent crude oil could rise to more than $80 per barrel before Christmas, at a time when more favorable supply-demand fundamentals, tensions in Saudi Arabia and a possible ban on Iranian oil from President Donald Trump have been providing tailwinds. Against this bullish backdrop, options traders have been making bets that the commodity will rise more than 20% in the coming months, according to Bloomberg. (For more, see also: Top 4 Oil ETFs for 2017.)

Last week, market participants traded 48,000 options contracts that would generate maximum profit should Brent surge in prices before Christmas, Bloomberg reported. Of these contracts, 22,000 gave their owners the right to purchase February Brent crude at $85 a barrel. Another 12,000 offered a purchase price of $80, and the remaining 14,000 provided a purchase price of $71. 

Oil Could Reach $90, Says One Analyst

While the aforementioned contracts point to expectations that Brent crude will rise above $80 in the coming months, Joe McMonigle, a Washington-based senior energy policy analyst, has predicted that oil could reach as high as $90 per barrel, according to Barron's. For Brent crude to reach this price level, several potential outcomes would need to materialize. 

Kurdish-Iraqi Turmoil

First of all, global oil supplies could suffer as a result of the ongoing turmoil involving Kurdish militias and Iraqi security forces, Barron's reported. Because of this situation, both Kurds and Iraqis have significant incentive to reduce exports, as doing so would give them greater clout in negotiations, according to a report issued by Eurasia Group. 

Saudi Shakeup

Another potential development that could push oil prices higher is the recent change in leadership in Saudi Arabia, where King Salman and his son Crown Prince Mohammed bin Salman have taken control of the nation's government, according to Barron's. This new regime—along with the interception of a missile which some believe was launched by Iranian-backed Houthi rebels—could provoke a military response from Saudi Arabia. 

Iranian Oil Ban

Finally, Trump could ban U.S. imports of oil from Iran, Barron's reported. The president could pull out of the U.S.-Iran nuclear agreement without obtaining the approval of Congress, noted McMonigle. He predicted that Trump will restore sanctions in January, emphasizing that this was a "central part" of the president's campaign. (For more, see also: How the Oil and Gas Industry Works.)

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