Forget the next week, think of the long term. That's the view of some oil experts who forecast that fuel prices will fall over the next two years, despite the possibility of a crisis in Iran that could upset production. A halving from current prices of $50 a barrel to $25 is the most likely outcome over the next 24 months, reckons Adam Sieminski, global energy strategist at Deutsche Bank.
Sieminski notes that six years ago some analysts were predicting oil prices of $10 a barrel and The Economist ran headlines suggesting the world was awash with oil. But now, he notes, the price spike is primarily due to a lack of spare capacity and the decline of the dollar. Spare capacity is close to its lowest for 30 years, at just over one million barrels a day.
Typically, when usage rates hits 90%, oil prices take off. The new rate is at 95%, says Sieminski. The decline in the trade-weighted value of the dollar - in which oil prices are quoted - means the increase is less remarkable in other currencies, he adds.
The other big reason behind the oil price surge is rising demand in China. Annual growth in oil consumption was stable at some 300,000 barrels a day until 2003, when it rose to 600,000 barrels a day. It is likely that this year will see a further increase of 800,000 barrels a day. Still, demand is likely to slacken to 500,000 barrels a day in 2005 as the Chinese economy slows, Sieminski predicts.
Other pressures include a preponderance of new oil in unstable countries, such as Angola, Azerbaijan and Kazakhstan.
The big uncertainty is Iran. The Middle East nation is the fourth largest oil producer in the world. Any disruption in its oil exports would have a massive and immediate effect on oil prices. One potential threat is military action by the US. But Ian Bremmer, president of the Eurasia Group, a political consultancy, says that this is unlikely anytime soon.
However, he argues that Israeli Prime Minister Ariel Sharon might be tempted to topple the Iranian government. In November, Iran will be in a position to complete its nuclear weapons programme, adds Bremmer, which could lead Israel to take action. Bremmer argues that Sharon's tenuous hold on his power base and desire to prove himself a tough leader to appease critics over his plan to remove settlers from the Gaza strip - a deeply unpopular move within Israel's rightwing - could be the spur.
Equally, it is possible that Iran will unilaterally cut off oil supplies to give it an ace in negotiations with the International Atomic Energy Agency.