US Secretary of State Mike Pompeo announced Monday that the United States will not renew sanction waivers for five countries that receive oil from Iran, according to the Washington Post.
“Today I am announcing that we will no longer grant any exemptions. We're going to zero, going to zero across the board," Pompeo said.
Those five countries include allies like Japan, South Korea, India, and Turkey, as well as China. The US had issued waivers to these nations, but they expire May 2. At that time, those nations will no longer be exempt from US sanctions if they're still importing oil from Iran.
"The decision is intended to bring Iran's oil exports to zero, denying its principal source of revenue," White House Press Secretary Sarah Sanders said.
It's not immediately clear if any of the five nations will be given extra time to wind down their purchases, or if they will be subject to US sanctions on May 3.
CNBC reports oil prices shot up more than 3 percent after following reports about the impending announcement. Brent crude futures increased more than 3 percent to over $74 per barrel, while US crude futures rose about 2.33 percent to $65.49 per barrel.
Brent prices have surged by more than a third this year, while US crude has risen by more than 40 percent.
However, US officials say they do not expect a significant reduction in oil supply because other countries, such as Saudi Arabia, have increased their oil production to fill the gap.
Sen. Ted Cruz (R-TX) applauded the end of oil waivers for Iran.
"This decision will deprive the ayatollahs of billions of dollars that they would have spent undermining the security of the United States and our allies, building up Iran's nuclear and ballistic missile programs and financing global terrorism," he said.
Israeli Prime Minister Benjamin Netanyahu welcomed the decision.
"President Trump and the American government's decision to intensify the sanctions against Iran is a decision of very great importance. This is the way to deal with Iranian aggression and this is the way to stop it."
Turkey warned of the consequences to the Middle East.
"Politically it is not right. Ethically it is not right. In terms of commerce, it is definitely not right. And it is also against international laws of commerce, against World Trade Organisation laws and it is risky for the region's stability," said Turkish Foreign Minister Mevlut Cavusoglu.
The move is the latest effort to increase pressure on the radical Islamic regime of Iran.
Earlier this month, President Donald Trump designated Iran's Islamic Revolutionary Guard Corps a foreign terror organization. It was the first time the United States has labeled another country's military a terrorist group.
"This unprecedented step, led by the Department of State, recognizes the reality that Iran is not only a State Sponsor of Terrorism, but that the IRGC actively participates in, finances, and promotes terrorism as a tool of statecraft," President Trump said in a statement.