The La Liga leaders relinquished their 1-0 lead, as well as their 39-match unbeaten streak, as Karim Benzema and Cristiano Ronaldo netted to give the visitors all three points over their perennial rivals.
"It hurts for everyone to lose, it hurts not to get the three points that would have kept the distance," Iniesta said after the game.
"This is a league that is competitive until the end and there are options, although we are still in a privileged position, which would have been even clearer if we won.
"I do not think that we have to blame the physical aspect, in the end it was a set of things.
"At 1-0 we lacked more control, positioning, they've caught us in various counter attacks and these actions are very dangerous. It was more a matter of placement."
The Spaniard however said the Catalans will not dwell on the defeat as they shift focus on their midweek Champions League clash Spanish opponents Atletico Madrid.
"We're hurting, but we're already thinking about the Champions League game," he said.
"We have to analyse the things that we did not do well, but we have a new incentive, another competition to continue with.
"[The loss] does not affect us mentally for the game on Tuesday."