The failure of Silicon Valley Bank shook equity markets and stoked concerns of a new financial crisis, sending oil prices down more than $2 a barrel on Tuesday and extending the decline from the previous day.

Brent crude futures slipped by 1.3% to $79.66 per barrel, having previously hit a drop of $78.76 while U.S. West Texas Intermediate crude futures (WTI) dipped by 1.6% to $73.56 per barrel.

Brent and WTI both hit their lowest levels since the start of January and December on Monday. Crude prices fell as stock markets continued to decline.

The abrupt closure of SVB Financial raised questions about the risks to other banks as a result of the U.S. Federal Reserve's significant interest rate increases during the previous year.

Traders no longer anticipate a 50-bps rate increase next week; current predictions point to a 25 bps increase.

Focus is now squaring on International Energy Agency will disclose its monthly report on Wednesday.