Benchmark brent crude dropped below $50 per barrel at one point.
Trading was bearish in the first session since Iranian oil minister Bijan Namdar Zanganeh said on Sunday that the country is planning to return to daily production of up to 3.9m barrels of oil per day within months.
“We are not asking anybody’s permission to get our rights back,” he added.
This news came on top of growth in the US operational oil rig count, which went up by 26 per cent over the past two weeks. US benchmark WTI hit a four-month low of $46.35 at one point in yesterday’s trading.
Meanwhile, data out yesterday revealed that the Organisation of Petroleum Exporting Countries (Opec) pumped at record levels in July. A poll by Reuters indicated that Opec’s output exceeded 32m barrels during the month.
HydroCarbon Capital’s Malcolm Graham-Wood put this increase down to a combination of factors, but said the upswing was “led mainly by countries getting in before the Iranian crude supplies kick in”.