Photo: Reuters/Raheb Homavandi
An oil production platform in Iran's Soroush oil fields. Photo: Reuters / Raheb Homavandi

The Trump administration announced on Monday that sanctions waivers granted to buyers of Iranian oil will not be reissued after they expire in early May. The decision, a White House statement said, is “intended to bring Iran’s oil exports to zero.”

Following the announcement, oil prices jumped to their highest level since before the exceptions were announced in early November of last year.

Secretary of State Mike Pompeo elaborated further in remarks to the press that the goal is “to deprive the outlaw regime of the funds it has used to destabilize the Middle East for four decades and incentivize Iran to behave like a normal country.”

“Any nation or entity interacting with Iran should do its due diligence and err on the side of caution. The risks are simply not going to be worth the benefits,” Pompeo warned.

Following the US withdrawal from the Iran nuclear deal last year, administration officials had initially threatened to sanction any country that did not completely stop buying Iranian oil.

But amid concerns about how the cut in oil supply would affect the US economy, the US eventually relented, granting the Significant Reduction Exceptions in November of last year that allowed large buyers of the country’s crude, including China, India and Japan, to continue imports.

The White House statement said that Saudi Arabia and the United Arab Emirates have agreed to “take timely action to assure that global demand is met as all Iranian oil is removed from the market.”

China, the largest importer of Iranian oil, has expressed no willingness to go along with US demands.

“China has consistently opposed the United States’ use of unilateral sanctions,” Chinese foreign ministry spokesman Geng Shuang said on Monday. “Cooperation between China and Iran is open, transparent, reasonable, and legitimate and deserves to be respected,” he added.

Oil prices have risen this year on a variety of factors, including Opec production cuts and political instability in Venezuela and Libya.

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