Oil shed some of its massive gains on Tuesday (September 17) as the United States flagged the possible release of crude reserves, but the threat of military action over the attacks on Saudi oil facilities kept prices elevated and stocks under pressure.
While equity market losses have not been large, shaky investor confidence continued to support safe-haven assets, with gold edging higher on Tuesday and Treasury prices rising.
Investors otherwise broadly remained on the sidelines ahead of an expected interest rate cut from the US Federal Reserve on Wednesday (September 18) and the next round of US-China trade talks on Thursday.
The benchmark Nikkei average added 0.2 per cent to 22,021.86 in mid-morning trade to mark its highest level since May 7, as soaring oil prices triggered by attacks on Saudi oil facilities boosted oil and gas-related companies.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.6 per cent.
Chinese shares fell 0.85 per cent, while Australian shares were down 0.27 per cent.
Brent crude, the international benchmark, fell 1.78 per cent to $67.79 per barrel in Asia on Tuesday.
On Monday Brent surged by 14.6 per cent for its biggest one-day percentage gain since at least 1988.
Saturday's attack on Saudi oil facilities has halved the kingdom's oil output, creating the biggest disruption to global oil supplies in absolute terms since the overthrow of the Iranian Shah in 1979, International Energy Agency data show.
In South Korea, stocks opened slightly lower with the Korea Composite Stock Price Index (KOSPI) down 3.14 points or 0.15 per cent to 2,059.08 points as of 0200 GMT.
China stocks fell on Tuesday as Beijing kept a key money rate unchanged even as recent readings pointed to further downward pressure on the world's second-largest economy.
In Hong Kong, stocks extended falls after credit rating agency Moody's downgraded the island city's outlook.
The Hang Seng index dropped 1.0 per cent, to 26,849.72, while the Hong Kong China Enterprises Index lost 1.0 per cent, to 10,520.42.
Equity market losses have not been large, shaky investor confidence continued to support safe-haven assets, with gold edging higher on Tuesday and Treasury prices rising.