TOKYO/LONDON: Oil prices fell more than 1 percent on Friday, set for a second straight week of decline as Libyan ports reopen and amid hopes that Iran will still export some crude despite U.S. sanctions.
Brent crude was down $1, or 1.3 percent, at $73.45 a barrel by 0840 GMT, heading for a weekly fall of around 4 percent.
US benchmark West Texas Intermediate crude lost 22 cents to $70.11, set for a weekly decline of around 5 percent.
Oil approached $80 in June and early July due to Libyan and Venezuelan supply disruptions and fears the United States would press all buyers of Iranian oil to cut imports to zero from November.
But prices weakened in recent days as OPEC member Libya reopened its ports in the east and U.S. Secretary of State Mike Pompeo said Washington would consider granting waivers to some of Iran's crude buyers.
Prices also slid amid broader market fears that a US-China trade dispute could hit global economic growth.
"While the oil market could not escape the mounting trade tensions and souring sentiment in financial markets, the sell-off was more about signs of rising supplies," Julius Baer analyst Carsten Menke said.
"If Iran was blocked from the market, we believe oil prices would rise towards $90 per barrel, which would cause significant fuel inflation, weigh on consumer and business sentiment and eventually hurt the economy," he added.
The International Energy Agency (IEA) warned on Thursday that the world was short of spare supply capacity and hence any new disruption could further elevate oil prices.
"Rising production from Middle East Gulf countries and Russia, welcome though it is, comes at the expense of the world's spare capacity cushion, which might be stretched to the limit," the Paris-based IEA said in its monthly report.
"This vulnerability currently underpins oil prices and seems likely to continue doing so,"the agency said.