Oil stocks have plunged on Wednesday, amid reports of a possible US presidential strike on Iran.
US stocks closed down 2.6 per cent and Brent crude oil futures slid 4.2 per cent.
Brent futures settled down 1.5 per cent at $47.25 per barrel.
US crude oil fell $4.25 to $49.42 a barrel on Wednesday after falling more than 5 per cent in the day earlier.
Brent has fallen $7.05 a barrel since it hit $42.13 a barrel last week.
US oil markets are expected to be the main battleground for the presidential race as US President Donald Trump and Republican challenger Hillary Clinton face off.
The president has been threatening to strike Iran over its nuclear programme, while Hillary Clinton has repeatedly accused him of being too soft on Tehran.
The sanctions on Iran’s economy have been in place since the Islamic revolution that toppled the country’s longtime ruler, Mohammad Reza Pahlavi, in 1979.
The US has said the sanctions are needed to stop Iran from developing a nuclear weapon.
The European Union imposed sanctions on Wednesday against more than 20 countries and institutions, including Russian, Chinese and Swiss banks.
The EU has accused Iran of funding terrorism and supporting the Taliban.
US energy companies were rattled by the announcement, which could add more than $3 trillion to the US economy.
Brent crude prices fell on Wednesday and Brent has dropped by more than 6 per cent since the election.
The plunge came as the International Monetary Fund (IMF) announced a $50bn rescue package for Iran in the first step towards lifting sanctions.
It said the package would be the first in a series of loans that will be announced in the coming days.
The deal has sparked fears that the world’s biggest oil producer could be left with the same kind of economic pain that the oil-rich Gulf nation suffered during the last economic crisis.
Iran is also in talks to sign a deal with world powers to curb its nuclear program, which the West believes is aimed at developing a bomb.
Iran has previously threatened to retaliate against US sanctions if they do not allow it to continue with its nuclear work.
US President Barack Obama and his Democratic challenger Hillary Trump have both called for a nuclear deal with Iran that would allow for the lifting of sanctions.