The oil markets are notoriously volatile and uncertain from one week to the next, but the latest tensions have even the most seasoned industry veterans scratching their heads over what’s likely to happen next.

With a range of major structural changes coming to the oil markets, it’s no surprise that so many people are curious about what’s going on.

Let’s take a quick look at the major factors affecting the oil price to get a glimpse of where the markets are heading.

Trade Wars

America’s trade wars, particularly with China and Turkey, have been dominating the headlines for the past few months, and with good reason. Nothing currently has more potential to stall the global growth story than rising trade tariffs and other barriers slowing down economic growth in affected nations.

While a general decline in global economic growth is bad enough for oil as the lifeblood of any modern economy, emerging markets are especially vulnerable to this current round of trade spats and they are the biggest importers of oil.

While the current impact of the trade wars are more threatening than tangible, they have the potential to cause major disruptions to global growth for years to come, and this will have a significant knock-on effect on the demand for oil.

Iran Sanctions

After tearing up the nuclear agreement with Iran, America is preparing to enforce sanctions on any company trading in Iranian oil at the start of November.

Iran is one of the largest oil producers in the world, and these sanctions could mean much of its more than 1 million barrels per day of capacity is taken out of the global supply chain.

There are a few mitigating factors in that many companies may still buy Iranian oil with little concern for the impact of American sanctions, notably Chinese and Indian refineries, but this will only mute the impact in supply.

Furthermore, affected companies will not wait until the November deadline in the hopes of an extremely unlikely deal occurring, and the supply effects are expected to start being felt as early as the beginning of September.

The biggest wild card in the Iranian sanctions issue is how much OPEC and partner countries will increase production to offset any drop in global supply, with no definitive guidance from spokespeople for any of the major global oil suppliers as of yet.

IMO Regulations

The International Maritime Organization has new sulfur content regulations coming into effect that will drive demand for fuels toward certain forms of distillates and away from others, which will in turn increase the overall demand for crude.

While some estimates have been muted, others have suggested that the long term impact on global crude demand could be as much as 1.5 million barrels, which could be enough to drive the price of oil to fresh highs above those seen in the last year.

Conflicting Forces, Conflicting Futures

With all the strong, countervailing forces at play, it is no surprise that there is so much uncertainty about the future of the oil markets.

While these forces are likely to play out over the next year, their impact on the shape of the oil markets could last for many more years to come.