(Persia Digest) - Uncertainty surrounding Iran's oil industry ahead of forthcoming U.S. sanctions could prompt "extreme volatility" for oil prices, BP's chief executive told CNBC Wednesday .

"I think it's going to be 45 days of extreme volatility, it could spike up, it could also go the other way," he told CNBC's Steve Sedgwick in London.

Holly Ellyatt for CNBCreports that Dudley's comments come at a time when oil market players are closely watching what happens when U.S. sanctions on Iran's oil industry come into force on November 4.

It's hard to be precise over how much of Iran's production will be affected by the sanctions. It largely depends on whether the country's oil-buying customers are afraid of secondary sanctions from the U.S. if they do business with Iran. BP's competitor Total announced in August that it was pulling out of a giant oil and gas project in the Islamic republic.

But BP and Serica Energy were granted a new license Tuesday to run a North Sea gas field partly owned by Iran showing the U.S. is willing to make some exemptions to the reach of the sanctions.

 "If waivers were granted to others, to big oil consuming countries, you could see it (the price) go down, there's a lot of uncertainty right now," Dudley said.

Some analysts predict as much as 1.5 million barrels per day could be removed from the market, an event that could cause prices to rise further. On Wednesday, Brent crude futures were trading at $84.96 per barrel while U.S. West Texas Intermediate was trading at $74.92.

No fall in demand

Dudley didn't see demand falling as a result of high prices due to global GDP growth (seen at 3.7 percent in 2018 and 2019 by the International Monetary Fund) still being robust. "It's still growing, demand, it might be a little bit off but we don't see that destruction yet," he said.

"You look at the GDP (gross domestic product) growth in the world and that's a very indicator on the demand growth for oil and it has been for decades and decades so … If you start to see half a percent come off GDP growth around the world, it might be a 200,000 barrel a day drop in demand, the way our economists view it, and it's not that much," he said.

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Earlier on Wednesday, Dudley told the Oil and Money conference in London that "we are a fair way off good oil prices," Reuters reported, and that the company was planning on a cycle of oil prices at $60 to $65 a barrel.

He echoed those comments to CNBC, stating, "We've been through this period of really low prices and they're up again and we can't plan on these high prices right now," he said, adding that markets are a "little off" what could be considered a healthy price for oil.

"So we're going to continue to plan our company at a much lower price."

President Donald Trump has called on OPEC to increase production to mitigate any Iranian shortfall and impact on prices. Saudi Arabia, the de-facto leader of OPEC, says it has the spare capacity to fulfil any shortfall created by Iran, but Iran has disputed that. Dudley said OPEC "is a better expert on the technical points" but believed that Saudi Arabia did have enough oil.

"I think Saudi Arabia does have capacity they could bring to the market. But on the other side of it you have very unpredictable circumstances in Venezuela and of course, the Iran sanctions. But Dan Yergin (energy expert at IHS Markit) had a great quote saying that actually the markets appear to be in balance, but emotionally they're not stable right now."

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