The United States (U.S.) said it will end sanctions waivers in May that had previously allowed eight countries to purchase crude from Iran, a move that aims to send energy shipments from what had been the fourth-largest Organisation of Petroleum Exporting Countries (OPEC) producer to zero.
The international benchmark Brent jumped 2.5 per cent to $73.77 per barrel, the highest level since November 1. West Texas Intermediate rose 2.1 per cent to $65.39.
President Donald Trump withdrew the U.S. from the Iran nuclear deal last year, calling on buyers to cut off oil imports from the Islamic Republic. The administration granted several countries including China, Turkey, and India temporary waivers to avoid price shocks.
The move was part of the Trump administration’s maximum-pressure campaign against Iran. The president designated the Islamic Revolutionary Guard Corps as a terrorist organisation earlier this month, the first time the U.S. has named part of a foreign government as such.
The State Department last year created a list of demands Iran would need to meet for sanctions to be lifted, including completely halting its nuclear and ballistic missile program and ending military engagement in Syria and Yemen.
Bloomberg reported Iran has threatened to retaliate by closing the Strait of Hormuz, a crucial passageway for Persian Gulf oil.