By Henning Gloystein
Front-month Brent crude futures were at $72.66 per barrel at 0740 GMT on Monday, down 17 cents, or 0.2 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down 30 cents, or 0.5 percent, at $62.84 a barrel.
Both Brent and WTI have lost more than 15 percent in value since early October, in part as hedge funds have cut their bullish wagers on crude to a one-year low, data showed on Friday.
Washington re-introduced sanctions against Iran on Monday, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of President Barack Obama, and adding 300 new designations including Iran's oil, shipping, insurance and banking sectors.
In response, Iranian President Hassan Rohani said in speech broadcast on state TV on Monday that Iran will break U.S. sanctions and continue to sell oil.
Washington has granted some exemptions. The United States said on Friday it will temporarily allow eight importers to keep buying Iranian oil.
"The impact of the sanctions is going to be largely softened as a result of this allowance," said Sukrit Vijayakar, director of Indian energy consultancy Trifecta.
Washington has so far not named the eight. China, India, South Korea, Turkey, Italy, the United Arab Emirates and Japan have been the top importers of Iran's oil, while Taiwan occasionally buys Iranian crude.
South Korea said on Monday it has been granted a waiver to at least temporarily continue to import condensate, a super-light form of crude oil, from Iran and also still continue financial transactions with the Middle East country.
Japan said it was in close communication with the United States. While Chief Cabinet Secretary Yoshihide Suga declined to detail any potential sanction waivers, he said his government had asked Washington that sanctions should not have an adverse impact on Japanese companies.
Chinese foreign ministry spokeswoman Hua Chunying expressed regret at the U.S. decision, but would not directly say if China had or had not been granted an exemption.
"China and Iran carrying out normal cooperation under the framework of international law is lawful and reasonable, and should be respected and protected," she told a daily news briefing in Beijing.
Oil markets have been preparing for the sanctions for months.
"Iranian exports and production had been declining steadily...Iranian exports show a decline of more than 1 million barrels per day (bpd) as of October from May," said Edward Bell of Emirates NBD bank.
SUPPLY SURGE
On the demand side, Bell warned that consumption may be slowing due to an economic slowdown, as seen in a sharp drop in refining profits.
"Sagging refining margins at a time of weak crude prices sends a very telling message to us that demand is underperforming," he said.
A slowdown in demand would come just as output is rising.
Joint output from the world's top producers - Russia, the United States and Saudi Arabia - in October rose above 33 million bpd for the first time, up 10 million bpd since 2010.
In the Middle East, Abu Dhabi National Oil Co (ADNOC) plans to increase its oil production capacity to 4 million bpd by the end of 2020 and 5 million bpd by 2030, ADNOC said on Sunday, compared with current output of just over 3 million bpd.
(Reporting by Henning Gloystein; editing by Richard Pullin)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)