AP
Donald Trump holds up a copy of the memorandum he signed, enacting a US departure from the Iran deal.
- Oil was up more than 3% on Tuesday.
- The US is calling for countries to stop importing oil from Iran by November.
- Markets had poised for a longer wind-down period for some countries.
- Follow oil in real time here.
Oil rallied Tuesday after US officials said all countries must stop buying Iranian oil by November or face sanctions, surprising markets that had poised for a longer wind-down period for some companies affected by President Donald Trump's exit from the Iran nuclear deal last month.
West Texas Intermediate was up 3.2% to $70.37 a barrel at 1 p.m. ET. Brent, the international benchmark, rose 1.7% to $76 per barrel.
A senior State Department official said the US will not issue any sanctions waivers, the Wall Street Journal reports, and countries who do not send their exports to "zero" by November 4 will be subject to penalties.
In May, Trump withdrew the US from the Iran nuclear deal, which previously eased economic penalties on the country so long as it curbed its nuclear weapons program.
The Trump administration said at the time that companies would get a 90- to 180-day grace period, which expires in November. But the international community widely expected for waivers to be issued to certain countries, a tactic the Obama administration used to avoid supply shocks. Instead, the senior official said, the US will ask Middle Eastern producers to fill in the gap.
The move comes days after OPEC and other supply-cutting countries led by Russia agreed to raise output as part of a 2015 deal to coordinate production levels. The cartel said it would reduce its level of compliance in coordinated supply cuts from more than 150% last month to about 100% beginning in July.
While Saudi Arabia has called for a nominal supply increase of about 1 million barrels per day, some analysts say the actual amount will likely be smaller because of output disruptions in some countries. Jeffries predicts the new agreement will bring an additional 700,000 barrels per day onto the market over the next few months.
WTI is up nearly 57% over the year.
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