LONDON: Oil prices fell on Tuesday as renewed doubts over US-China trade talks stoked concerns over global growth, but US sanctions on Iran and Venezuela tightened supply and helped stem losses.
Brent crude oil futures were down 88 cents, or 1.24 percent, at $70.36 a barrel at 1330 GMT.
US West Texas Intermediate crude futures fell by 81 cents, or 1.3 percent, to $61.44.
US President Donald Trump on Sunday said he would raise tariffs on $200 billion worth of Chinese goods from 10-25 percent by Friday. The comments dragged on both Asian and US stock markets.
"An escalation in the US-China trade war has brought oil prices under renewed pressure," said Abhishek Kumar, head of analytics at Interfax Energy in London.
"The spat has reinvigorated demand-side concerns, given that the conflict has been adversely impacting prospects for global economic growth."
On the supply side, oil markets remain tense with the United States has tightening sanctions on Iranian oil exports and plans to bulk up its forces in the world's top oil-exporting region.
US officials announced on Sunday that the movement of an aircraft carrier strike group and a bomber task force towards the Middle East was meant to counter "credible threats", but Tehran dismissed the move as "psychological warfare".
US sanctions have already halved Iranian crude exports over the past year to less than 1 million barrels per day (bpd), with shipments to customers expected to drop to as low as 500,000 bpd in May as sanctions tighten.
US Energy Secretary Rick Perry said on Tuesday that Saudi Arabia was increasing its oil production to meet needs arising from sanctions on Iran.
Bank of America Merrill Lynch said it expected Saudi Arabia "to bring back oil production slowly as Iranian barrels exit the market", adding that it expects Brent to have a floor at $70 a barrel in current market conditions.
Washington has also placed sanctions on oil exports from Venezuela, a founding member of the Organization of the Petroleum Exporting Countries (OPEC).
Some analysts predicted that production curbs agreed by OPEC and other producers such as Russia would continue to boost prices.
"The recent Brent pullback has taken prices too low in the face of tight fundamentals and growing supply risks, just as refiners come back from extended spring turnarounds," Goldman Sachs said.
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