Oil prices have surged in recent months, mainly due to speculation that Russian oil will be off the market.

But the boom could quickly turn into a bust if this scenario doesn’t turn out to be the case and supply outstrips demand.

The oil market has a long history of booms and busts, driven by geopolitical events and business cycles. For instance, a boom in the early 1970s was caused by the Yom Kippur War, followed by another boom in the late 1970s, driven by the Iran revolution.

Then came the bust of the early 1980s, caused by the U.S. recession. A couple of more booms followed it due to the Iraqi wars and more busts due to the 2008-09 recession and the fracking revolution, which turned the U.S. into the world’s largest oil supplier.

What’s the case this time around? Is the oil market in for another boom or another bust? A strong case can be made for either scenario.

The case for another boom scenario is an embargo against Russian oil, limiting the flow of oil to global markets and, therefore, pushing the price of oil higher.

Then there’s the potential that the demand for oil picks up as the world economies return to normal as COVID-19 restrictions ease, which could give oil prices another push.

And there’s inflation, which usually boosts demand for hoarding commodities, including oil.

The case for another bust scenario is the increase in oil supply by large oil suppliers, beginning here in the U.S., which is the world’s largest oil producer. The oil and gas rig count, an early indicator of future output, rose by four to 693 on April 14. According to Baker Hughes, which keeps a tally for the U.S. energy industry, that’s the highest since March 2020. And the rig count could accelerate in the months ahead as the Biden administration has opened up federal lands for oil and gas development.

Then there’s a significant increase in oil supplies overseas. For instance, last year, Iraq, the second-largest producer in OPEC, exported 100,563,999 barrels for $11.07 billion, the highest revenue since 1972.

And there’s Iran, with its oil production reaching the pre-sanction levels of 3.8 million barrels per day, according to the Iranian Oil Minister Javad Oji. Figures are expected to get even better in the year ahead.

“By taking effective measures in onshore and offshore oil fields, drilling new wells, repairing wells, rebuilding and modernizing facilities, and oil collection centers, the current oil production capacity has reached before the sanctions, and we have no problem in performance and this amount of production," Oji said in a Tehran Times.com editorial.

There’s a good chance that sanctions against Iran will be lifted, according to Jonathan Merry, the founder of MoneyTransfers.com.

“When energy supply shortages and geopolitical uncertainty drive crude prices to their highest levels in almost a decade, returning to the 2015 deal, which initially relaxed sanctions in exchange for curbs on Iran's nuclear program, would bring Iranian oil back to the market,” Merry said.

Meanwhile, if it happens, an oil embargo against Russia may not be effective, as large oil consumers like China and India could continue buying Russian oil. In addition, several Chinese cities have resumed lockdowns, which could taper the country’s oil demand.

Still, there’s one more factor that could push oil prices lower, a slowdown in the U.S. and European economies, as both the Fed and ECB have ended monetary accommodation, with the Fed already in a tightening mode.

In short, good arguments can be made for both another boom and another bust, though they could balance each other, helping oil prices move sideways for a while before they break in either direction.