The US has fully reinstated sanctions, removed eight waivers granted to countries allowing them to continue importing Iranian oil. The Trump administration stated on Monday that any country that continues importing oil from Iran after 2 May will be subject to US sanctions.
US Secretary of State Mike Pompeo noted that Saudi Arabia and the UAE would make up for any supply shortage.
"I can confirm that each of those suppliers are working directly with Iran's former customers to make the transition away from Iranian crude less disruptive," he said.
Saudi Arabia's energy minister, Khalid Al-Falih, issued a statement to the same effect, "Saudi Arabia will coordinate with fellow oil producers to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance."
The statement, issued through the Saudi Press Agency, noted that "in the next few weeks, the Kingdom will be consulting closely with other producing countries and key oil consuming nations to ensure a well-balanced and stable oil market, for the benefits of producers and consumers as well as the stability of the world economy."
In December 2018, OPEC+ agreed to cut output by 1.2mn barrels per day (bpd) with the brunt of the cuts resting on Saudi Arabia and Russia. With these developments, and the crises in Venezuela and Libya which have dented their output, it is unclear how OPEC+ will react.
Following this news, Brent crude jumped to $74 per barrel, the highest it has reached this year.