The latest move also comes as major Japanese banks prepare to halt transactions related to Iran, which will make it hard for distributors to process payments even if they continue buying Iranian oil. The US benchmark, West Texas Intermediate was at $70.10 per barrel.
"US producers are resisting temptation and exercising capital discipline, Opec and Russian Federation have convinced market participants they are managing the supply of over half of global production, the U.S. is using sanctions more actively, and several key Opec producers are at risk of being failed states", Barclays said.
Oil prices were also under pressure as global shippers stopped loading Iranian oil in preparation for USA sanctions against Iran.
Edward Bell, analyst at Emirates NBD bank, added: "Iranian production is already showing signs of decline, falling by 150,000 bpd last month".
The sanctions were originally halted in 2015, when China, Russia, Britain, France, Germany, the European Union, Russia, the UK, Iran and the United States signed the Joint Comprehensive Plan of Action - also known as Iran nuclear deal.
Despite these fears, the global markets don't have much to worry about as they are still fairly well supplied.
This output was helped by Libya recovering some of its production capability.
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Output from OPEC's second-biggest producer has jumped to a record and is set to expand further, reflecting higher investment in the country's southern fields following crude's rally.
For the first time in 3 weeks, 2 new oil rigs were added to USA oil production operations, taking the count of active oil rigs to 862.
The economists said: "The EU, Korea, Japan and UAE collectively accounted for 41 percent of the average 2.6million barrels per day Iran exported in the first half of 2018". Thanks to the US Labor Day holiday, trading volumes in both US and European crude oil futures were relatively light.
Oman's oil minister, also speaking to CNBC, said not enough attention was being paid to how trade tensions could damage China's demand for oil.
China's manufacturing activity grew at the slowest pace in more than a year in August, with export orders shrinking for a fifth month and employers cutting more staff, a private survey showed Monday.
Innes, however, feels that it is too early to predict whether the economic slowdown due to these trade wars was going to impact the demand for oil.
Europe is expected to be one of the regions to which Iranian oil sales could considerably drop due to Western shipping companies, insurers, and refiners backing out of purchases from Iran over concerns that they could run afoul with the U.S. Administration.