LONDON (Reuters) – The price of oil slipped on Friday as an escalating trade dispute between the US and other major economies called into question future growth in demand, despite markets remaining tight due to supply disruptions and impending US sanctions on Iran.
U.S. light crude CLc1 was 20 cents lower at 07:30 GMT at $ 73.25 a barrel. On Thursday, the contract reached its high since November 2014 at $ 74.03 a barrel.
Brent crude LCOc1 was unchanged at $ 77.85 a barrel.
Trade disputes between the United States, on the one hand, and major economies, such as China, India and the European Union, on the other hand, are beginning to cloud the prospects for global economic growth.
Traders fear that tariffs on exports, including US crude oil, will hinder flows of goods and trade in and disrupt demand for oil.
Commodities Brokerage Marex Spectron said this week that the macroeconomic outlook is "predominantly bearish".
Despite the trade conflict oil supply is scarce.
North American oil reserves fell as a failure in Canada's Syncrude included more than 300,000 barrels per day (bpd) of production. According to operator Suncor Energy ( SU.TO ), it is expected that the failure will last at least until July.
Outside North America, record demand and voluntary supply cuts, led by the Organization of Petroleum Exporting Countries (OPEC), have pushed prices higher.
Unplanned supply disruptions from Libya to Venezuela have further strained the market.
OPEC and Russia have stated that they will increase production to meet demand and replace crude oil with unplanned disruptions, but many analysts believe the additional supply may be inadequate.
"The clear message of the OPEC + meetings was that those countries with unused capacity would increase production to keep the market well supplied," Jefferies Bank said Friday.
The US government is trying to shut Iran out of the oil markets by fully implementing its sanctions in November.
"The Trump government seems ready to continue with a maximum pressure campaign on Tehran," said Phillip Futures.
Major buyers of Iranian oil, including Japan, India and South Korea, have indicated they could stop importing Iranian crude if the US sanctions.
Until then, however, Asia is buying as much Iranian oil as possible. Imports of Iranian crude oil by large customers in Asia rose to its highest level in eight months in May.
China, India, Japan and South Korea imported 1.8 million barrels a day from Iran last month, an increase of 15 percent over the previous year.
Additional coverage by Henning Gloystein in Singapore; Arrangement by Jane Merriman