Brent crude futures fell $2.66, or 4.1%, to settle at $62.40 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $2.84, or 4.8%, to settle at $56.25 a barrel, after touching their highest in more than five weeks on Monday.
SINGAPORE: Oil prices were mixed on Tuesday as U.S. sanctions on oil exporters Iran and Venezuela kept markets on edge while concerns that an escalating Sino-U.S. trade dispute could slow the global economy also kept crude somewhat in check.
U.S. West Texas Intermediate (WTI) crude futures were at $62.29 per barrel at 0135 GMT on Tuesday, 4 cents above their last settlement.
Brent crude oil futures were at $71.16 per barrel, 8 below their last close.
Analysts said there was a number of factors putting upward pressure on oil prices.
The United States is tightening sanctions on Iranian oil exports and on Monday said it was boosting its military presence in the Middle East.
Tehran has said it would defy these sanctions and try to continue selling oil in the "grey market".
Iran has also threatened "reciprocal actions" against U.S. sanctions, which could mean restarting some of its nuclear programme.
The U.S. sanctions have already 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 U.S. sanctions tighten.
Beyond Iran, the crisis in Venezuela has also disrupted oil supplies from this OPEC member, 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.
Despite this, there were still factors keeping oil prices from rising further.
Bank of America said rising supply from the United States, as well as from Saudi Arabia and Russia could soon weigh on prices.
The bank said "global oil demand growth is still decelerating ... (and) further global GDP weakness into year-end would hurt oil prices."
Global growth has been threatened by trade disputes between the United States and China.
Talks between the world's two biggest economies hit a wall over the weekend, when U.S. President Donald Trump announced a raft of new import tariffs on Chinese goods.
Overall, Bank of America expects Saudi Arabia "to bring back oil production slowly as Iranian barrels exit the market", but added that despite this relief Brent crude oil prices would likely have a price floor at $70 per barrel. - Reuters
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