Investment bank Goldman Sachs expects volatile oil prices in the short-term on the back of uncertainty over possible disruptions to supply, with benchmark Brent crude in a $70-80 per barrel range. Oil prices have declined sharply the past week as the Sino-U.S. trade war intensifies and were hovering below $72 per barrel on Tuesday, not far from their lowest since mid-April. "Production disruptions and large supply shifts driven by U.S. political decisions are the drivers of this new fundamental volatility, with demand remaining robust so far," the bank said in a note dated Monday. The administration of U.S. President Donald Trump is pushing countries to cut all imports of Iranian oil from November as it reimposes sanctions over Tehran's nuclear programme. But U.S. Treasury Secretary Steven Mnuchin said on Monday that in certain cases, there could be waivers for countries that need more time to wind down imports of oil from Iran. "The uncertainty on the magnitude and timing of the supply shifts has muddied the near-term outlook for oil fundamentals," Goldman said, adding that it continued to expect high supply volatility with potential for further disruptions. "These supply shifts, alongside the ongoing surge in Saudi production, create the risk that the oil market moves into surplus in third-quarter 2018," the bank said. However, prices are expected to get some support longer term as global oil inventories are weak, according to the bank. "Ultimately, global inventories are low, oil demand remains robust and we still expect a deficit once U.S secondary sanctions are reintroduced." Goldman said it still expects Brent to retest $80 per barrel, although this may occur only late this year depending on U.S. oil policies, rather than this summer as it previously expected. The bank added that the recent escalation in trade tensions was unlikely to have much impact on its 2018 oil demand growth view, but would likely create downside risks to its 2019 oil demand growth forecast of 1.6 million barrels per day.