Oil prices hit 2019 highs on Tuesday after Washington announced all Iran sanction waivers would end by May, pressuring importers to stop buying from Tehran.
Despite the move by Washington, analysts said global oil markets would be able to cope with the Iran disruption as there was enough spare capacity from other suppliers.
Brent crude futures were at $74.58 per barrel at 0628 GMT, up 0.7 percent from their last close and their highest level since November 2018.
U.S. West Texas Intermediate (WTI) crude futures marked their strongest since October 2018 at $65.10 per barrel, up 0.8 percent from their previous settlement.
The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which allowed Iran's eight biggest buyers, most of them in Asia, to continue importing limited volumes.
Before the reimposition of sanctions last year, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries (OPEC) at around 3 million barrels per day (bpd), but April exports have shrunk to below 1 million bpd, according to ship tracking and analyst data in Refinitiv.
(GRAPHIC: Iran seaborne crude oil & condensate exports - https://tmsnrt.rs/2DE8CHt)
The U.S. government has this year repeatedly said it wants to cut Iran's oil exports below 1 million barrels per day (bpd) or even to zero, and that new action would be taken by May.
Still, many analysts expected Washington to show more tolerance towards importers most exposed to Iran.
Barclays (LON:BARC) bank said in a note following the announcement that the decision took many market participants by surprise and that the move would "lead to a significant tightening of oil markets".
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