Current geopolitical tensions are making it harder and harder for oil-producing nations to make decisions that will help stabilize crude prices, Russian Energy Minister Alexander Novak told CNBC Sunday.
Asked about tensions in the Middle East, Novak said that problems in the region were becoming “greater and greater,” but added that the U.S.-China trade conflict was also having a destabilizing effect.
“We have seen in the last few days an exchange of the imposition of customs duties. In addition, we have seen risks of a geopolitical nature with regards to this region,” Novak told CNBC’s Dan Murphy in Jeddah, Saudi Arabia, according to a translation.
“This all tells us that the market is very unstable. And there are many factors that have become bigger and it’s more complicated to take longer-term decisions that are fundamental to the market,” he added.
The comments come amid escalating tensions between Tehran and Washington and just days after drone attacks on Saudi oil infrastructure carried out by Iranian-aligned Houthi rebels from Yemen.
The President Donald Trump administration has tightened its chokehold on Iranian oil exports and its metals industry as part of its “maximum pressure” campaign. While Iran announced it would end some of its key obligations to the 2015 nuclear deal if European signatories didn’t rescue the country’s ailing oil and banking sectors hit hard by sanctions.
Asked whether Russia could do more to promote security and stability in the region as a friend of Iran, Novak said: “We need to fine tune our relationships as fully as possible so that the issue of energy security is at the forefront.”
He caveated that it was hard to comment on this week’s incidents in the Middle East without adequate detail, but said they demonstrate how “fragile the question of achieving and providing energy security is.”
“Oil is produced every day. Every day we need to produce 100 million barrels. And with these sorts of incidents there could be a serious disparity that will affect the energy security,” he said.