Commonwealth Securities senior economist Ryan Felsman says the situation is fluid and forecasts Brent crude oil will hover about the $US110 mark in both the June and September quarters.
"But there is still a risk it could shoot up to 150 bucks a barrel if tensions escalate," Mr Felsman told AAP.
He expects petrol prices in Australia could reach $2.50 a litre in coming weeks, but further falls in world oil prices would limit the damage to household budgets.
Still, Mr Felsman still predicts an average petrol price of $2.20 a litre over the next few weeks.
That compares with record national average of 197.6 cents a litre last week.
Such gyrations come at a time when Treasurer Josh Frydenberg is putting together his March 29 budget amid calls for a cut in the 44 cents a litre fuel excise to ease the petrol pump pain.
Deputy Prime Minister Barnaby Joyce isn't keen, saying touching the fuel excise wouldn't do anything to help ease the increasing cost of living.
"But what it will do is take away money we spend on roads - we still need to keep our roads moving, we still need to keep our trucks moving," he told Sky News.
Mr Felsman agrees that a temporary cut in fuel excise, like thery have introduced on New Zealand, would prove irrelevant if there was a further spike in the Brent crude price.
He believes it would be better to temporarily remove the 10 per cent GST on petrol.
However, that would take agreement from, not only the two houses in federal parliament, but every state and territory.
Finance Minister Simon Birmingham said Australia's petrol prices were in the bottom quarter among developed nations.
"I know it's tough out there, but relative to many other parts of the world, Australia is performing better and that gives us the chance to keep looking for how we can support households like we've done through tax cuts," he told the Seven Network.