Obsidian Risk Advisors' Managing Principal Brett Erickson said on Tuesday that talk of de-escalation in the ongoing U.S.-Israel and Iran war has sent crude oil prices down, but warned that the slip may not last.

Oil Is 'Significantly Oversold And Underpriced,' Brett Erickson Says

In a post on the social media platform X, Erickson said that "oil appears to be SIGNIFICANTLY oversold and underpriced," pointing to its $92/bbl price at the time when the analyst made the post.

He outlined that there was a "significant fear premium priced in that saw it reach upwards of $118/barrel" in the run-up to the midterm elections and general elections in Israel, calling the surge "artificially high."

Erickson then said that prices were now "artificially low on the false belief that the US/Iran War is effectively out of the woods," but added that it was not the case.

Scott Bessent Moves Into Military Base

The news comes as Treasury Secretary Scott Bessent reportedly moved into a military base after a reported threat on his life from Iran.

The threat comes as the Treasury Department introduced a host of new restrictions on Iran and Iran-linked entities as part of the U.S.'s Operation Economic Outcast.

The Operation Economic Outcast, which was introduced in August, initially targeted 60 entities, individuals, vessels and more linked to Iran with sanctions.

Anthony Blinken Weighs in on Iran

On the other hand, former Secretary of State Antony Blinken blamed President Donald Trump's withdrawal from former President Barack Obama's 2015 Iran Nuclear Deal, calling the move the "costliest mistake" from the deal.

Meanwhile, Trump reiterated that negotiations with Iran were progressing well and suggested further military action might not be necessary.

Oil, Gas Movement

As uncertainty remains, gas prices have fallen across the U.S. According to the American Automobile Association (AAA) data, the national average price of gas on Wednesday was $3.9788/gallon. Diesel prices also fell on Wednesday, with the national average at $6.1306/gallon.

At press time, the West Texas Intermediate (WTI) futures expiring in December grew 0.14% to $86.16. Brent futures contracts expiring in January gained 0.31% to $91.77.

The ProShares Ultra Bloomberg Crude Oil (NYSE:UCO) ETF recorded a 0.16% decline to $50.25 during overnight trading on Wednesday. The United States Oil Fund (NYSE:USO) ETF also slipped 0.25% to $141.09 during overnight trading.