Brent for December settlement fell US$3.13 to US$76.70 a barrel on the London-based ICE Futures Europe exchange.
Saudi Arabia's Energy Minister says Riyadh can not compensate for possible oil disappearance from global markets in the wake of United States sanctions on Iran.
Both contracts notched the biggest percentage drop since July.
"We will decide if there are any disruptions from supply, especially with the Iran sanctions looming", Mr Falih said.
Saudi Arabia's energy minister has used public comments over the past week to tone down the kingdom's veiled threat to use oil as a political weapon to retaliate against possible sanctions related to the Khashoggi killing.
Mr Falih added that Saudi Arabia will raise oil output to 11 million barrels per day from 10.7 million.
Oil edged above US$80 a barrel on Monday, lifted by nervousness over a worsening diplomatic crisis between Saudi Arabia and the West, just two weeks before USA sanctions potentially choke off Iranian crude supplies.
Saudi Arabia is in "crisis" over the murder of the journalist Jamal Khashoggi, the country's energy minister, Khalid Al-Falih, warned today. Falih said on Monday there was no intention of doing that.
"We will meet any demand that materializes", Al-Falih said at the country's signature investment conference, which is being overshadowed by an global outcry over the killing of Saudi government critic Jamal Khashoggi.
"The rise in oil prices has slowed down the economic growth of many consumer countries, hitting the global economy hard", Zangeneh added.
The United States warned Russian Federation on Sunday about assisting any potential Iranian attempts to evade an upcoming round of U.S. sanctions against the Islamic Republic, scheduled to take effect on November 4, months after U.S. President Donald Trump withdrew America from the 2015 nuclear deal.
Meanwhile, Russia's oil production is now 150,000 bpd higher than the October 2016 level, the baseline for the global oil production deal, TASS news agency quoted Energy Minister Alexander Novak as saying.
The American Petroleum Institute is scheduled to release data on U.S. crude stockpiles on Tueday afternoon, followed by more comprehensive report by the U.S. Department of Energy on Wednesday.
Other OPEC members, meanwhile, had added only 105,000 barrels per day of extra oil in total during the period, which means they are not capable of producing more than current levels, he said.