A United Nations panel's dire warning on climate change also added to the gloomy mood after fires in Greece have razed homes and forests and parts of Europe suffered deadly floods last month.
Brent crude futures fell by $2.66, or 3.9%, to $68.04 a barrel by 1212 GMT after a 6% slump last week for their biggest weekly loss in four months.
US West Texas Intermediate (WTI) crude futures fell $2.67, or 4.07%, to $65.61 after plunging by nearly 7% last week. On Monday the contract fell as low as $65.15, its lowest since May.
"Concerns about potential global oil demand erosion have resurfaced with the acceleration of the Delta variant infection rate," RBC analyst Gordon Ramsay said in a note.
ANZ analysts pointed to new restrictions in China, the world's second-largest oil consumer, as a major factor clouding the outlook for demand growth.
The restrictions include flight cancellations, warnings by 46 cities against travel and limits on public transport and taxi services in 144 of the worst hit areas.
On Monday China reported 125 new COVID-19 cases, up from 96 a day earlier. In Malaysia and Thailand, infections hit daily records.
China's export growth slowed more than expected in July after outbreaks of COVID-19 cases and floods while import growth was also weaker than expected.
"Both (benchmark crude) contracts look vulnerable to more bad news on the virus front, focusing on mainland China," OANDA senior market analyst Jeffrey Halley said in a note.
China's crude oil imports fell in July and were down sharply from the record levels of June 2020.
A rally in the US dollar to a four-month high against the euro also weighed on oil prices after Friday's stronger than expected US jobs report spurred bets that the Federal Reserve could move more quickly to tighten US monetary policy.
A stronger US dollar makes oil more expensive for holders of other currencies.
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