Energy firms rallied on Wednesday after a surge in oil prices but Asian markets struggled to maintain early momentum and extended their recent losses as trade war fears torment investors.

Both main crude contracts piled higher after the State Department warned US allies they would be hit with sanctions if they did not halt Iran oil purchases by November 4.

Analysts said that while the announcement was not unexpected, the mere confirmation of the fact was enough to push investors into buying mode.

The commodity has enjoyed a healthy run since the weekend, when OPEC and Russia agreed to a moderate lift in their 18-month-old output ceiling.

Unrest in producer Libya was also providing support.

The higher oil prices — Brent added more than two percent and WTI more than three percent Tuesday — lifted energy firms. CNOOC soared more than three percent in Hong Kong while PetroChina added 0.4 percent. Woodside Petroleum in Sydney added 1.4 percent, while Tokyo-listed Inpex climbed 1.5 percent and JXTG soared more than six percent.

However, trade tensions continue to loom large, with investors on edge awaiting the next developments. AFP