TOKYO: Oil prices fell nearly two per cent in early Asian trade after strong gains in recent days on the back of the conflict in the Middle East.

West Texas Intermediate was down 1.98 per cent at US$79.44 per barrel, having soared 8.5 per cent on Thursday to US$81.01. Brent North Sea Crude, which rose 4.9 per cent on Thursday, was not yet being traded.

"Further action to reduce pressure on oil is imminent and the oil (price) seems to have pretty much stabilised," US President Donald Trump said on Thursday.

On Tuesday, Trump had ordered the US Development Finance Corporation to provide political risk insurance for all maritime trade through the Gulf.

He said the US Navy would "if necessary" begin escorting tankers through the Strait of Hormuz — a vital chokepoint for crude which Iran has effectively closed off — "as soon as possible."

On stock markets on Thursday, a rebound petered out after Asian markets closed, with European exchanges shedding around 1.5 per cent and Wall Street's main indices also retreating.