The United States aims to cut Iran's crude exports by about 20 percent to below 1 million barrels per day (bpd) from May by requiring importing countries to reduce purchases to avoid USA sanctions, two sources familiar with the matter told Reuters.
Brent crude settled at $67.55 a barrel on Wednesday. South Korean officials have not commented on the situation, but Iranian officials have said that they are working on negotiations that are being affected by US sanctions.
Washington has put restrictions on Iran's port, energy and shipping sectors but it has given temporary waivers to the country's eight biggest oil customers, which include China, India and Japan, so they can keep buying Iranian crude.
Secretary of State Mike Pompeo on March 12 said the United States was seeking to "bring Iranian crude-oil exports down to zero as quickly as market conditions will permit". As reported by Iran's state-controlled media, an Iranian oil tanker was attacked last Thursday by a swarm of 11 pirate speedboats, who were driven off by Iranian Navy commandos.
"Last November, we re-imposed all of the United States sanctions authorities previously lifted under the Iran nuclear agreement, and added over 700 individuals, entities, aircraft, and vessels onto our sanctions list on a single day".
Both sources said they were briefed by the Trump administration on the matter but were not authorized to speak publicly about it and asked for anonymity.
Trump "has made it very clear that we need to have a campaign of maximum economic pressure" on Iran, Hook said, "but he also doesn't want to shock oil markets".
Western insurers are steering clear of Iranian vessels and Iran's attempts to export crude to the USA -approved buyers is further complicated by having to put its tankers under its own flag, rather than a third country such as Panama.
"On the numbers part, we'll get an updated assessment as we get closer to the end of the 180 day period", of the first round of waivers that ends in May, the spokesperson said.
India has been allowed by Washington to continue to buy about 300,000 bpd oil till early May.
Having its tankers flagged in Iran rather than a third country such as Panama presents further problems for Tehran, even if it can secure more vessels and approved buyers for its oil, shipping experts say. China has already openly said they'll keep buying oil with or without U.S. permission, and India is also seen likely to keep doing so simply out of necessity.
It is unclear whether the administration will be able to convince China, India and Turkey - all of whom depend heavily on Iranian oil and have criticized the USA sanctions on Iran - to reduce imports.
Iran has been in discussions with South Korea to purchase several new super tankers, but the talks have gone nowhere as of yet.
Which is bad math, because Iran is exporting 1.25 million barrels per day as of February.
Iran, a member of the OPEC, exported nearly 3 million bpd of oil at its pre-sanctions peak.