Richard Robinson, manager of the Ashburton Global Energy fund, has said US President Donald Trump's rhetoric will do little to stop oil price rises, which could even spike beyond $120 a barrel by the end of next year.
The manager said he was extremely bullish about where oil prices were heading due to the "blizzard" of supply issues hitting the market.
Despite Trump blaming OPEC for high oil prices, Robinson said all the President's actions, such as placing sanctions on Iran (which is expected to cut at least 1.2 million barrels on the supply side) and placing tariffs on steel imports (which increases the cost of pipeline investments by 5%-9%) had caused prices to go higher.
On 4 July, Trump said on Twitter: "The OPEC monopoly must remember that gas prices are up and they are doing little to help. If anything, they are driving prices higher as the US defends many of their members for very little $'s. This must be a two way street. REDUCE PRICING NOW!"
Robinson commented the US President did not want high oil prices because this would upset voters before the mid-term elections.
"All the stars are aligning for higher [oil] prices and, when we get that worry, then rhetoric becomes elevated," Robinson said. "It shows he is concerned and he understands there is an issue coming up with gasoline prices."
Along with "rock-solid" demand, the manager said supply issues in Venezuela, Iran and the US mean oil prices would only head higher from this position.
Oil prices have soared over the past year, with Brent Crude shooting up over 75% from the year lows seen in June 2017 to break through $80 a barrel in mid-May for the first time since November 2014. Brent crude is currently trading at $74 a barrel.
Robinson said the US, which has been the swing producer over the past few years, would struggle to increase its output any further due to pipeline constraints.
This is why he has been moving investments from the Permian basin, where he sees pipeline congestion as a big issue, into UK and European companies.
Furthermore, the US sanctions on Iran under former President Barack Obama cut 1.2 million barrels on the supply side, which Robinson said Trump would be keen to beat.
"If you get an incident in the Middle East such as the US trying to invoke a regime change in Iran, you could have spikes to over $120 a barrel.
"Trump has been putting pressure on the Saudis to make up for Iran's lack of exports," he added. "But it is not easy for Saudi Arabia to maintain production at 10.5 million barrels and they have very low inventories."
In addition, Robinson also pointed to supply issues in troubled Venezuela, saying the country's production would continue to fall due to the "massive mismanagement" of state-owed oil company PDVSA, which President Nicolas Maduro has been using as a "piggy bank".
"Maduro is talking about increasing production but unless you spend millions and millions and suddenly find rigs from nowhere with everyone willing to work for free, I cannot see how that can possibly turn around."