MOSCOW (Dispatches) - The U.S. trade war against China and sanctions regime is contributing to instability in the global oil market and putting pressure on prices, Russian Energy Minister Alexander Novak told CNBC on Wednesday.
"We can see that the pricing situation today depends not just on the supply/demand balance or the general economic situation but also on the uncertainty that we observe today in the global markets: the trade wars, the sanctions that the U.S. pursue," Novak said, speaking to CNBC's Geoff Cutmore at the Eastern Economic Forum (EEF) in Vladivostok, Russia.
Novak said geopolitical uncertainties such as the U.S.' decision to impose a massive package of tariffs on Chinese imports, as well as its sanctions on Russia and those coming up on Iran, could prompt oil prices to rise modestly.
"If we talk figures, I think that the additional premium is about $5-6 on top of the usual oil price, that would reflect the supply/demand balance,” he said.
Benchmark Brent crude futures are currently trading at $79.21 while U.S. West Texas Intermediate (WTI) futures are at $69.82 per barrel.
Novak's comments come as oil market focus shifts away from a successful 2016 deal between OPEC and Russia (and other non-OPEC producers) to curb output in order to support prices, to current threats to the global oil supply.
Forthcoming U.S. sanctions on Iran's oil sector, coming into effect in November, are seen as the biggest disruptive force with oil market analysts predicting that Iran's daily production could fall by as much as 1.5 million barrels a day.