Crude oil prices neared the $100 mark on Friday amid continued escalation between Iran and the United States, following a deadlock and attacks on vessels in the Strait of Hormuz by Iran’s Islamic Revolutionary Guard Corps earlier this month.
Oil prices were on track for strong weekly gains after Houthi strikes on Red Sea oil tankers raised fears over the possible closure of another key maritime route.
Market supply was further tightened as Kazakhstan temporarily reduced production after its main export pipeline was taken offline.
Brent crude futures dropped 72 cents, or 0.72 per cent, to $99.97 a barrel at 01:26 GMT, though the benchmark remained on track for a 13.5 per cent gain this week.
US West Texas Intermediate (WTI) crude fell 70 cents, or 0.76 per cent, to $91.49 a barrel, pointing to a 10.9 per cent weekly increase. Both benchmarks surged in the previous session, with Brent settling 7 per cent higher and WTI gaining 6.2 per cent on Thursday. It was the first time Brent had closed above $100 since May.
In its annual white paper released today, the Japanese government warned that close attention was needed on the extent to which the Middle East conflict was hurting and could further damage its economy.
The report noted that rising costs from the conflict were occurring at a faster pace than in 2022, when the Russian invasion of Ukraine drove up energy prices.
Japan has been particularly affected by ongoing disruptions in the Strait of Hormuz. The country relies heavily on fuel imports from the Middle East and has been forced to dip into its reserves to avert an energy crisis.
Rising energy costs, disruptions in the Strait of Hormuz, and continued instability have dealt a severe blow to Asian economies, including Japan, India, South Korea and Taiwan.
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