The US has not renewed sanctions waivers to eight countries importing oil from Iran, applying further pressure on Tehran in a bid to reduce the country's oil exports to zero.
President Donald Trump decided not to reissue the "significant reduction exceptions" when they expire, meaning buyers of Iranian oil must end their transactions by May 2 or face sanctions.
Last November, the US reimposed sanctions targeting Iran’s oil sector after Mr Trump's exit from the 2015 nuclear deal agreed to by his predecessor, Barack Obama.
But Washington had granted waivers to China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey to continue importing oil from Iran.
With the exemptions ending in 11 days, these countries will be forced to terminate their purchases or face the threat of US sanctions.
Read more: What are the implications?
The benchmark Brent crude price was at a six-month high before the White House announcement. The statement said that the UAE and Saudi Arabia had agreed to "take timely action" to ensure that any gap in supply would be met.
"The US, Saudi Arabia, and the UAE, three of the world's great energy producers, along with our friends and allies, are committed to ensuring that global oil markets remain adequately supplied," it said.
The US decision followed extensive inter-agency meetings and consultation with allies.
Turkey’s Finance and Treasury Minister, Berat Al Bayrak, visited Washington this month and met Mr Trump. Ankara has been expecting Washington to renew the waivers.
The US President also called Saudi Arabia's Crown Prince Mohammed bin Salman and Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, before the decision.
Mike Pompeo, the US Secretary of State, spoke to Iraqi Prime Minister Adel Abdul Mahdi on Monday.
“The secretary reiterated the United States’s support for a strong, sovereign and prosperous Iraq, as outlined in our bilateral strategic framework agreement,” the US statement said.
Mr Pompeo had earlier welcomed “Iraq forging closer ties to neighbouring Arab states” after a recent visit by Mr Abdul Mahdi to Saudi Arabia.
Iraq had obtained a three-month waiver in March for gas and oil imports from Iran. It is unclear if this waiver will be renewed.
The US has been working on several fronts to pressure Iran. It has designated the Islamic Revolutionary Guard Corps as a terrorist organisation and has also imposed sanctions on Tehran's affiliates, such as Hezbollah in Lebanon.
Mr Pompeo had met about "15 Iranian-American community leaders" in Texas last week, Axios reported on Sunday.
When asked about a change of leadership in Iran, he did not give clear intentions.
“We're careful not to use the language of regime change, Mr Pompeo said, adding that the administration would not intervene militarily in Iran.
He said the decision would “deprive the outlaw regime” of important funds. He estimated that 40 per cent of Tehran’s revenues come from oil exports.
“We will no longer grant any exemptions. We are going to zero,” Mr Pompeo said. "We've made clear if you don't abide by this, there will be sanctions. We intend to enforce the sanctions."
He warned countries still importing Iranian oil, that “the risks are not worth the benefit”.
Mr Pompeo said the duration of the policy would depend “solely on Iranian leaders”.
He called on Iran to curb its nuclear programme, stop terrorism, regional destabilisation and arbitrary detentions of US citizens.
Mr Pompeo hoped Iran would do that and come back to the negotiating table.
"We will continue to apply maximum pressure on the Iranian regime until its leaders change their destructive behaviour and respect the rights of the Iranian people," he said.
The White House underlined its determination "to end the regime's destabilising activity threatening the US, our partners and allies, and security in the Middle East".
Iran's Foreign Ministry said it would "act accordingly" and threatened to disrupt international shipping channels and oil shipments.
"The Strait of Hormuz is a marine passageway and if we are barred from using it, we will shut it down," Reuters reported the ministry as saying.
Iranian news agency Tasnim quoted an official as saying: "Iran is not waiting for America's decision or the lack of it to export its oil.
"We have years of experience in neutralising efforts by enemies to strike blows against our country."