Global oil prices have dived into bear market territory after five consecutive weeks of losses triggered by fears that the United States-China trade war could slow the global economy and dampen energy demand.
The oil price slide gained momentum as rising crude exports from the United States and Saudi Arabia dampened concerns over lower Iranian production following the start of United States sanctions this month.
The oil market's global benchmark Brent reached highs of US$85 ($126) a barrel earlier this year after US President Donald Trump vowed to clamp down on Iran's burgeoning oil exports with fresh sanctions against the state and all those who buy its crude.
However, prices dropped below US$70 a barrel at the weekend for the first time since April after a 10-day losing streak triggered by signs that China's jittery economic growth could be dealt a major blow by a string of US trade tariff hikes.
Brent crude later settled down 0.7 per cent at US$70.18.
The market switched its attention from one Trump economic policy to another as fears of a slowdown in the world's most energy-hungry nation all but erased concerns that US sanctions against Iran could effectively erase more than a million barrels of its oil from the market.
Any remaining jitters over Middle Eastern supply were eased by a flurry of US waivers to eight Iranian crude buyers. The unexpected leniency should mean that Iran crude flows will reduce gently rather than face a cliff-edge.
Fresh deals to export crude from Iraqi oil regions could also help to ease the squeeze.
Ashley Kelty, of Cantor Fitzgerald in Europe, said he is "not hugely surprised by the move into bear territory". "We would not be surprised to see Brent testing the US$65 level in the near term," he added.
However, some market commentators have warned that a rapid return to higher oil prices should not be ruled out. Goldman Sachs and RBC Capital both warned that prices could surge in the near-term if the risk of a Chinese slowdown recedes and the full brunt of Iranian sanctions takes hold.
Helima Croft, of investment bank RBC Capital, said China may prove to be a distraction from the US clampdown on Iran.
"We're in a bear trap over fears about China," she said this month.
She said there is "a path to US$100 a barrel" once the risk of a Chinese slowdown gives way to the reality of the US cuts to Iranian oil exports.
"Either way you cut this, we're already down a million barrels from spring and we have several hundred thousand barrels left to go.
"That is a material importance for the market," Croft added.
Goldman Sachs's Jeff Currie warned that the US is likely to bring in steep cuts to the waiver allowances by 50 per cent each 180 days.
This compares with 20 per cent cuts from President Barack Obama in 2012. Currie said oil prices are likely to bounce back to US$80 a barrel before the end of the year.
Should prices continue to fall, members of the Organisation of Petroleum Exporting Countries (Opec) may agree to prop up prices by limiting their own exports.
The market monitoring arm of the cartel is due to meet this weekend and may recommend a tighter grip on the market in 2019, according to reports.