Benchmark oil for May delivery dropped $1.05 to finish at $92.45 a barrel in New York.
European jitters have escalated since the government in Cyprus rejected a bailout plan Tuesday that would have taxed bank deposits. Without a bailout deal, some of Cyprus' banks could collapse, devastating the country's economy and potentially forcing it to exit the euro currency.
Brent crude, used to price many kinds of oil imported by U.S. refineries, fell $1.25 to $107.47 a barrel on the ICE Futures exchange in London.
In the U.S., the average price for a gallon of gasoline dropped a penny to $3.69. That's 17 cents below a year ago, when oil was trading at $107 a barrel.
In other energy futures trading on the Nymex:
— Wholesale gasoline fell 5 cents to $3.07 a gallon.
— Heating oil was flat at cents to $2.90 a gallon.
— Natural gas fell 3 cents to $3.94 per 1,000 cubic feet.
Pamela Sampson in Bangkok and Pablo Gorondi in Budapest contributed to this report.