By Stephanie Kelly
Brent crude futures dropped 96 cents, or 1.3 percent, to $72.21 a barrel, by 11:03 a.m. EST (1603 GMT). The global benchmark hit a session low of $71.85 a barrel, lowest since Aug. 20.
U.S. West Texas Intermediate (WTI) crude futures fell 82 cents, or 1.3 percent, to $62.28 a barrel. The session low was $61.96 a barrel, its weakest since April 9.
Iran said it had so far been able to sell as much oil as it needs and urged European countries opposed to U.S. sanctions to do more to shield Iran.
The United States on Monday restored sanctions targeting Iran's oil, banking and transport sectors and threatened more action. U.S. Treasury Secretary Steven Mnuchin said Washington aimed to bring Iranian oil exports to zero, but 180-day exemptions were granted to eight importers: China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey.
This group takes as much as three-quarters of Iran's seaborne oil exports, trade data shows, meaning the Islamic Republic will still be allowed to export some oil for now.
Industry estimates suggest Iran's oil exports have fallen 40-60 percent since Trump said in May he would reimpose sanctions. However, exemptions could allow exports to rise again after November.
Turkish President Tayyip Erdogan said the country, a top importer of Iranian oil, would not abide by the sanctions, which he said were aimed at "unbalancing the world."
"The details on the Iran sanctions waivers are trickling out, and it appears much more Iranian oil will remain on the market in the near-term than previously thought," said John Kilduff, a partner at Again Capital Management in New York.
Concerns about oil demand also weighed on prices. The trade dispute between the United States and China threatens growth in the world's two biggest economies and currency weakness is pressuring economies in Asia.
On the supply side, output is rising from the world's top three producers. Russia, the United States and Saudi Arabia combined produced more than 33 million bpd for the first time in October, enough to meet more than a third of the world's almost 100 million bpd of crude oil consumption.
Top crude exporter Saudi Arabia has cut the December price for its Arab Light grade for Asian customers.
Hedge fund managers were net sellers of petroleum-linked futures and options last week.
Morgan Stanley on Tuesday lowered its price forecast for Brent, saying the global benchmark will stay at $77.5 per barrel to mid-2019.
(Reporting by Stephanie Kelly in New York, Shadia Nasralla in London and Henning Gloystein in Singapore; Editing by David Evans, Mark Potter and David Gregorio)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)