The United States and China have started a trade war on Friday, introducing bilateral tariffs worth 34 billion Dollars, while not showing willingness to start talks with a view to reaching a ceasefire.
Oil prices steadied on Monday as an increase in US drilling, likely to lead to higher shale production, balanced evidence of tightening supply.
Shares of top oil marketing companies led the gains on NSE index, as US-China trade war fears weighed on oil prices.
Once U.S. sanctions are fully implemented, FGE estimated 1.7 to 2 million bpd of crude and condensate would be cut out of markets.
US crude output stayed flat at 10.9 million barrels per day (bpd).
Oil prices seesawed on Friday in a nervous market as the U.S. implemented a raft of tariffs on Chinese goods, which should prompt Beijing to retaliate, potentially including a duty on United States crude imports.
Crude Oil WTI futures for delivery in August traded at $74.8 per barrel, or 0.38 percent higher from their previous close.
As part of the retaliatory response, Beijing has threatened a 25% tariff on United States crude imports, although it has not specified an introduction date. He also said that he is thinking of slapping additional duties on $500 billion in Chinese goods if Beijing retaliates.
American oil producers may find a new friend in India as they brace for a trade war with China that could curb USA shipments. In May, Indian refiners imported 4.7 million barrels or about nine times more than April and the most of any month based on USA government data going back to 2015.
A Chinese import tariff would make US oil uncompetitive in China, forcing its refiners to seek alternative supplies in a tight market.
South Korea is reported to have stopped importing Iran's oil and condensate in what appears to be a temporary halt until the country obtains an exemption from USA curbs on buying Iranian oil.
That would happen in a global oil market that has steadily tightened this year.
-China trade dispute, most traders agree that yesterday's government report is exerting the most pressure on the market.
USA investment bank Jefferies said on Friday it expected a drop in Iranian exports well in excess of 1 million bpd due to the US sanctions.
In other news, Iran's oil minister accused Trump over the weekend of insulting OPEC by ordering it to boost production and lower down prices.
"At the same time, Venezuela... will lose another 400,000 bpd by year-end with production going to below 1 million bpd", FGE said, adding that another 300,000 bpd of Libyan capacity was disrupted.