CNBC | Patti Domm: Saudi Arabia, the world's largest oil exporter, has become a source of market uncertainty just as the U.S. is about to curb Iran's oil exports.

Yet, oil prices are hovering near five-week lows, and the market does not show any concerns about a potential loss of supply.

The Iranian sanctions are expected to remove about 1 million barrels a day from the global market by the end of the year, and some analysts had expected the price of crude to move higher ahead of the Nov. 5 sanctions. That was even before Saudi Arabia became a wild card, with lingering questions about whether its Crown Prince Mohammed bin Salman had any role in the death of journalist Jamal Khashoggi.

However, Saudi Arabia still has the confidence of oil markets for now, which have been reassured by Saudi Energy Minister Khalid al-Falih that Saudi will turn on the pumps to make up for less Iranian crude. Al-Falih said on Monday that Saudi can raise its output to 11 million barrels a day and that it will not use oil as a weapon. Saudi output has already increased to about 10.7 million barrels a day.

"There is no intention," the energy minister told Russia's TASS news agency when asked whether there could be a replay of the 1973-style oil embargo.

"When Khalid al-Falih comes out and says we're going to do 11 million barrels a day, he maintains a lot of credibility with the market," said Helima Croft, RBC head of commodities strategy. "If he changed his tune, the market would take that threat seriously."

Another factor holding down oil prices is the fall off in global oil demand. Analysts say for now, trade wars with China and a stronger dollar are working in favor of lower prices, by dampening emerging market demand.

"There's been a modest slowdown but I think there's a more serious risk of slowdown in 2019. That assumes the dollar continues to stay bid," said Aakash Doshi, commodities analyst at Citigroup. "..the downside risk to economic growth globally is not coming from the U.S. but likely coming from EM."

Doshi said his base case is that Saudi Arabia will continue to provide the supply it promises, and the market is expecting that as well. He expects Brent crude to average just under $80 per barrel in the fourth quarter and in the high $70s in the first quarter.

Croft said even with increased Saudi output, the market could be tight at year end, particularly if there are any losses of barrels form Nigeria or Libya. The U.S. is producing about 11 million barrels a day, but a lack of pipeline capacity has made it difficult to move oil from the Permian basin in Texas, and by the second half of next year that situation should improve, putting more U.S. oil onto the world market.

Brent futures ended Monday at $79.83, up five cents, and West Texas Intermediate futures were also up five cents at $69.17 per barrel.

"Despite these developments and the November 5 deadline for Iran-related US measures, global oil prices have declined 7% in the past 10 days due to rising US inventories. While geopolitical factors raise the risk that Saudi Arabia backtracks on its supply commitments to offset Iranian sanctions, we do not expect production cuts given the resulting loss of market share to US shale and other oil producers," noted J. P. Morgan analysts.

Al-Falih last week described the Saudi role in the oil market as that of a 'central bank,' an institution meant to provide stability. His comments Monday come a little more than a week after Saudi Arabia issued a statement saying it would retaliate economically if sanctions were placed on it, due to the death of Khashoggi.

But Saudi Arabia has backed away from that statement and has made efforts to show it continues to have a strong relationship with the U.S. even as members of Congress say the prince could be behind the killing of Khashoggi. The prince met with Treasury Secretary Steven Mnuchin met Monday, and MBS, as the prince is called, stressed the importance of the strategic U.S.- Saudi strategic partnership, according to the Saudi foreign ministry.

The situation in Saudi Arabia is far from resolved. Turkish President Recep Erdogan said he will release more information on the journalist's death on Tuesday.

"It looks like the administration is not going to soften on [Iran] sanctions but there is a real question mark now on whether Congress will put limits on U.S. support for Saudi Arabia's regional initiatives including the war on Yemen. Will the U.S. block arms sales? Will we block certain types of assistance we can provide in the Yemen war?" Croft said.