Oil prices fell about 1%, heading for a weekly loss of over 6%, with investors worried about oversupply as the US said it will temporarily spare eight jurisdictions from Iran-related sanctions.
US secretary of state Mike Pompeo announced the decision in a conference call.
The waivers could allow top buyers to keep importing Iranian oil after economic penalties come back into effect on Monday.
Brent futures for January delivery fell 26c to $72.63 a barrel, a 0.4% loss. US crude fell 61c to $63.08 per barrel, a 1% loss.
Both contracts have fallen more than 15% from the near four-year highs touched in early October on worries the looming Iran sanctions could drain supply from global markets.
Mr Pompeo did not name the jurisdictions, but said the EU as a whole would not receive one.
Bloomberg reported that Washington has agreed to let eight countries, including South Korea, Japan, and India, continue buying Iranian oil, citing a US official.
China, the top importer of Iranian crude, is still in discussions with the US on terms, but is among the eight countries, it is believed.
Iran said it had no concerns over the reimposition of sanctions. “It seems as though all the worries about tightening supplies due to the loss of Iranian barrels in the market have dried up,” said Gene McGillian, director of market research at Tradition Energy in the US.
“On top of that, concerns regarding reduced global demand has also helped... the market continues to search for a bottom.”
Crude drew some support as world equity markets rallied on hopes the US and China were mending trade relations. Worries about a US-China trade war had rattled stock markets, weighing on oil prices.
Prices have also been under pressure as world oil production has been rising significantly in the past two months.
Russian Energy Ministry data showed yesterday that the country pumped 11.41m barrels per day of crude in October, a 30-year high.
The Organisation of the Petroleum Exporting Countries (Opec) boosted oil production in October to 33.31m barrels per day, up 390,000 barrels per day and the highest by Opec since 2016.
The US is challenging Russia for title of top producer, with US crude production now above 11m barrels per day.