Oil prices pull back after reports that Israel will not target Iran's oil infrastructure, coming down from recent gains fueled by conflict in the Middle East. Citi global energy strategist Eric Lee joins Market Domination Hosts Julie Hyman and Josh Lipton to explain his bull case that oil prices could still climb to $120 during the first quarter of 2025 on supply disruptions.

"It's all the geopolitics," Lee tells Yahoo Finance, explaining, "If there is indeed some direct or knock-on effect where oil infrastructure is hit, there are a number of scenarios where this could impact a couple of million barrels a day of Iran's oil production and exports. And in that case, we could be looking at something more akin to what happened to Russia [and] Ukraine in 2022," the strategist explains, noting that he is "being careful not to dismiss out of hand the kind of statements that are coming out of Israel and their intentions."

Amid geopolitical uncertainty, Lee says that the possibility that Saudi Arabia could step in and fill the gap if Israel did attack Iran's oil infrastructure is "one big part of what's keeping the base case in the market relatively tepid."

The strategist explains his analysis assesses the probability of different scenarios playing out in the oil market. "It's very tricky. We need to put it out there as a very plausible possibility. The situation for geopolitics has always been one that is one of a tail risk. So even if the probability is relatively low, it [has a] potentially high impact... If we see de-escalatory actions, something more like what happened in April, then we should be able to see prices drift back lower and maybe towards the $70 level."

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This post was written by Naomi Buchanan.