US President Donald Trump has decided that five large countries will no longer be exempt from penalties if they continue to import Iranian oil.
The White House announced that sanctions waivers for China, India, Japan, South Korea and Turkey would not be renewed when they expired on 2 May.
The decision is intended to deny Iran its principal source of revenue.
President Donald Trump reinstated the sanctions last year after abandoning a landmark nuclear deal with Iran.
Under the 2015 accord with six world powers, Iran agreed to limit its sensitive nuclear activities and allow in international inspectors in return for sanctions relief.
The Trump administration hopes to compel Iran to negotiate a “new deal” that would cover not only its nuclear activities, but also its ballistic missile programme and what officials call its “malign behaviour” across the Middle East.
US officials have insisted they are not seeking “regime change”.
The sanctions have led to a sharp downturn in Iran’s economy, pushing the value of its currency to record lows, quadrupling its annual inflation rate, driving away foreign investors, and triggering protests.
In November, the US reimposed sanctions on Iran’s energy, ship building, shipping, and banking sectors, which officials called “the core areas” of its economy.
However, six-month waivers from economic penalties were granted to the eight main buyers of Iranian crude – China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece – to give them time to find alternative sources and avoid causing a shock to global oil markets.
Three of the eight buyers – Greece, Italy and Taiwan – have stopped importing Iranian oil. But the others had reportedly asked for their waivers to be extended.
The White House said Mr Trump’s decision to end the waivers was “intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue”.
“The United States, Saudi Arabia, and the United Arab Emirates, 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 added.
“We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market.”
The price of global benchmark Brent crude rose by 2.6% to $73.87 a barrel on Monday, after earlier hitting $74.31 – the highest since November.