The European Union cranked up pressure to force Tehran to halt its disputed nuclear programme with further sanctions on Iran's banking, shipping and industrial sectors.
The measures came days after the Islamic Republic said it would negotiate on halting higher-grade uranium enrichment if given fuel for a research reactor.
Front-month Brent crude, due to expire later in the day, slipped 13 cents to $115.67 a barrel by 0326 GMT, after settling up $1.18. US oil slipped 21 cents to $91.64.
"Fundamentally there is no shortage of oil with Saudi Arabia and others maintaining high output while inventory levels are also good," said Ken Hasegawa, a commodity sales manager with Newedge in Tokyo.
"On the other hand, there is tension in the market with what is happening in Iran and the Turkey-Syria issue. That has put a floor on prices."
The twin factors - of ample supply and worries over a worsening crisis in the Middle East - will keep oil well balanced unless the geopolitical situation worsens, Hasegawa said. He expects Brent to trade between $110-$118 in the short term, for the next 10 days, with US oil in an $88-$95 range.
The recent sanctions, one of the EU's toughest moves against Iran to date, reflect mounting concerns over the nuclear programme and also Israeli threats to attack Iranian atomic installations if a mix of sanctions and diplomacy fails.
Iran maintains that its nuclear project has only peaceful energy purposes and has refused in three rounds of talks since April to scale back uranium enrichment unless major economic sanctions are rescinded.
WEIGHING ON PRICES
Yet, prices are under pressure from expectations US crude inventories rose for the week to Oct. 12 due to an anticipated rise in imports, while weak demand may lift gasoline stockpiles, a preliminary Reuters poll showed on Monday.
The poll of seven analysts forecast a 1.5 million barrel build. All but one analyst estimated an increase in crude inventories.
Adding to overall supplies, top exporter Saudi Arabia produced an average of 9.77 million barrels a day (bpd) of crude oil in September, an industry source said.
According to official Saudi government figures supplied to OPEC, the world's biggest oil exporter produced 9.75 million bpd in August and 9.80 million bpd of crude in July.
Brent may edge up towards $117.92 per barrel as a rebound from the Oct. 3 low of $107.67 seems to have extended, while US oil may rise towards $94.06 per barrel, according to Reuters technical analyst Wang Tao.