Oil prices will remain relatively low in the next year or two as supplies remain ample despite ongoing cuts by OPEC, although potential new sanctions by the U.S. against Iran pose upside risk to the market, the president of consultancy Facts Global Energy (FGE) said.

Starting this year, OPEC and other producers including Russia have agreed to cut output by 1.8 million barrels per day (bbl/d) in order to prop up prices.

While this was resulting in a gradually tighter market compared with the strong overproduction of the 2017 to 2016 period, FGE President Jeff Brown told the Reuters Global Commodities Summit that fuel inventories would likely remain high in 2018 and 2019.

"We don't see big reasons for inventories to go down a lot from still high levels now. Hence we don't see big reasons for prices to go up or down by much in 2018, and it's similar for 2019," Brown said in Singapore on Oct. 11.

With production in the United States expected to rise from around 9.5 million bbl/d now to over 10 million bbl/d next year, Brown said OPEC would have little choice than to extend the production cuts beyond their currently scheduled end in March 2018.

"OPEC doesn't have an exit strategy. They need to continue to manage the market, or prices will drop a lot... If OPEC decides not to roll over, oil prices could easily could fall back into the $30s," he said.

One of the biggest risks to oil supplies and prices are potentially new U.S. sanctions against Iran, which President Donald Trump is threatening to impose, not two years after they were lifted under a 2015 deal between Tehran and leading world powers after Iran agreed to limit its disputed nuclear program.

"While the U.S. appear to be going alone on this, we have seen in the past that U.S. sanctions alone can be very effective," he said.

"U.S. sanctions could cut off a lot of Iranian oil trade finance. Last time we saw this, it cut off 1 million bbl/d of supplies. I don't think it'd be that big this time round, but it would still be significant," Brown added.

Despite strong oil demand growth, especially from emerging economies, and the risk of unexpected supply disruptions, Brown warned against industry hopes for a return to $100/bbl prices.

"The problem with $100 oil is that at this price, every production project works. You can't have a balanced market at $100 when every single project will happen. We, therefore, have to get used to long-term prices not much above $60 or $70," he said.

In the long-term, Brown said that rising fuel efficiency and the emergence of electric vehicles would eat into fuel demand.

"With gasoline, once we get into the 2020s, demand growth tapers off... and we see a peak around 2030," he said.

"This is tough for refiners. Right now they're making good money from gasoline, but once you look out 7 to 8 years, things get choppy."

Headquartered in London and Singapore, FGE focuses on advising clients in oil and gas markets with a focus on Asia.