Trump has unilaterally withdrawn from a 2015 Iranian nuclear deal last May and restored extensive sanctions on the Iranian economy in November. At the time, his administration granted exemptions to eight countries which allowed them to continue to import limited quantities of crude oil from Iran.
The market expected Washington to extend the derogations for five of the countries. However, sources claim that any country that still imports oil from Iran will be subject to US sanctions starting May 2.
The Trump administration will work with regional Iranian rivals Saudi Arabia and the United Arab Emirates to compensate for the decline in Iranian supplies, the White House said.
The Saudis and the Emirates are currently collaborating with their fellow OPEC members and several other oil-producing nations, including Russia, to limit oil supplies. The so-called OPEC + alliance has tried to keep 1.2 million bpd off the market since January, following the collapse of oil prices in the last months of 2018.
The White House announcement suggests that the group will soon reverse course and increase production.
"The Trump administration and our allies are determined to support and expand the maximum campaign of economic pressure against Iran to end the destabilizing activity of the regime that threatens the United States, our partners and allies and security in the Middle East, "the White House said.
Three of the countries that received the exemptions – Greece, Italy and Taiwan – have already cut their imports to zero. However, analysts had expected the Trump administration to extend the exemptions to China, India, Japan, South Korea and Turkey, which took advantage of the derogations during the first six-month window that began in November.