Oil prices fall despite elevated tensions in the Middle East

Oil prices fell on Friday in Asia despite heightened tensions in the Middle East due to the seizure of an Iranian oil tanker by British Royal Marines.

It was reported that British Royal Marines helped the authorities in Gibraltar seize the ship on the basis of evidence that it was heading to Syria in breach of EU sanctions. The news elevated tensions in the Middle East and could potentially disrupt supply.

Following the incident, Iran’s Foreign Ministry summoned the British ambassador to voice “its powerful objection to the illegal and unacceptable seizure” of its ship.

“These actions are likely to have been meant as a signal to Syria and Iran - as well as the U.S. - that Europe takes sanctions enforcement seriously and that the EU can also respond to Iranian brinkmanship related to ongoing nuclear negotiations.” - said Matthew Oresman, a partner with law firm Pillsbury Winthrop Shaw Pittman, in a CNBC report.

Despite the news, oil prices were down today due to concerns on economic growth and weakening demand, according to analysts.

U.S. Crude Oil WTI Futures were down 1% to $56.77 by 1:15 AM ET (05:15 GMT). International Brent Oil Futures was down 0.03% to $63.29.

"Global growth remains the main factor holding back crude prices," said Alfonso Esparza, senior analyst at OANDA. The OPEC+ deal will keep prices from falling too hard, but there must be an end to trade protectionism to assure the demand for energy products recovers."