Oil prices were under pressure on Tuesday from concerns the escalating United States (US)-Iran trade dispute could slow the global economy, while US sanctions on crude exporters Iran and Venezuela helped keep the market on edge.
Brent crude oil futures were at $71.09 per barrel at 0341 GMT, 15 cents, or 0.2 per cent, below their last close.
US West Texas Intermediate (WTI) crude futures were at $62.20 per barrel, 5 cents below their last settlement.
Analysts said there were a number of factors driving oil prices.
One is a concern that global economic growth is threatened by the intensifying trade dispute between the US and China.
Talks between the world's two biggest economies hit a wall over the weekend, when US President Donald Trump announced a raft of new import tariffs on Chinese goods.
“US-China trade tensions are set to be at the forefront of the market's collective mind this week, as any nuance out of discussions in Washington could trigger knee-jerk moves by traders,” said Han Tan, analyst at futures brokerage FXTM.
Tanker brokerage Eastport said in a note that “worsening trade friction between Washington and Beijing poses a downside risk to our forecasts” for petroleum products.
On the supply-side, oil markets remain tense as the US tightens sanctions on Iranian oil exports, saying on Monday it was boosting its military presence in the Middle East.
Iran has threatened “reciprocal actions” against US sanctions, which could mean restarting some of its nuclear programme.
The US sanctions have halved Iranian crude oil exports over the past year to below 1 million barrels per day (bpd), and shipments to customers are expected to drop as low as 500,000 bpd in May as sanctions tighten.
Beyond Iran, the crisis in Venezuela has also disrupted oil supplies from this member of the Organisation of Petroleum Exporting Countries (OPEC), with Washington placing oil sanctions on the Venezuelan government under President Nicolas Maduro.
“As the White House raises the stakes on Iran and Venezuela, what is the oil endgame?” asked Bank of America Merrill Lynch in a note.
“The Venezuelan political situation seems untenable but oil exports could continue to contract until the industry receives a capital injection, a dim prospect for now,” the bank said.
“In addition. Iran oil exports could collapse further over the coming months. While America's maximum pressure policy on these two regimes may pay off, additional oil supply losses cannot be ruled out,” it added.
Bank of America said it expected Saudi Arabia “to bring back oil production slowly as Iranian barrels exit the market”, adding that overall it saw Brent crude oil prices having a floor at $70 per barrel in current market conditions.