The United States re-introduced sanctions against Iran on Monday, although it also gave some of its closest allies exemptions that will allow Tehran's biggest customers, mostly in Asia, to still buy crude for now.
Washington restored measures lifted under a 2015 nuclear deal negotiated with Tehran by the administration of President Barack Obama, adding as well 300 new designations including Iran's oil, shipping, insurance and banking sectors, aiming to cripple Iran's main export revenues from the petroleum industry.
Despite this, Iran will continue to sell some oil as the United States has granted sanctions waivers to some of its closest allies in Asia.
Washington said on Friday it will temporarily allow eight importers to keep buying Iranian oil. It did not name who had received the exemptions or provide any further details.
South Korea said on Monday it has been granted a waiver to at least temporarily continue to import condensate from Iran and also still continue financial transactions with the Middle Eastern country. The super-light crude oil is a critical feedstock for South Korea's large petrochemical industry.
South Korea, a U.S. ally and one of Asia's biggest buyers of Iranian oil, asked Washington for "maximum flexibility" last week, after some of its construction firms cancelled energy-related contracts in the Islamic republic due to financing difficulties.
Under U.S. law, exceptions to the renewed Iran sanctions can be granted for up to 180 days.
Japan said on Monday it was in close communication with the United States on the measures, although Chief Cabinet Secretary Yoshihide Suga declined to provide any details.
Japan has asked that sanctions should not have an adverse impact on the activities of Japanese companies, Suga said.
Other Asian buyers of Iranian oil, including its two biggest, China and India, are also seeking waivers.
Chinese foreign ministry spokeswoman Hua Chunying said on Monday that China expressed regret at the U.S. decision to re-impose sanctions on Iran and reiterated its objections to unilateral sanctions, but she would not directly say if China had or had not been granted an exemption.
"China and Iran carrying out normal cooperation under the framework of international law is lawful and reasonable, and should be respected and protected," Hua told a daily news briefing in Beijing.
Turkish Trade Minister Ruhsar Pekcan said on Saturday that Turkey has received indications that it will be among the countries to be granted a waiver from U.S. sanctions against Iran, but it is still awaiting clarification on Monday.
Some European countries may also receive exemptions.
Iran's biggest oil buyers over the past years have been China, India, South Korea, Turkey, Italy, the United Arab Emirates and Japan. Taiwan also occasionally buys cargoes of Iranian crude, but is not a major buyer.
Iran itself said it would simply ignore the sanctions.
With major buyers receiving exemptions, markets did not react strongly to the start of the sanctions, with benchmark Brent crude oil prices trading around $72.60 per barrel at 0655 GMT, down 0.3 percent from their previous close and more than 15 percent below their most recent peak in early October.
"Oil fell as U.S. sanctions on Iran proved to be less severe than previously anticipated," said Hussein Sayed, chief market strategist at futures brokerage FXTM.
"Exempting eight countries from the U.S. sanctions means Iranian Oil will continue to flow and there's no longer risk of a supply shortage," he said.
Oil markets have been preparing for the sanctions for months.
"Iranian exports and production had been declining steadily ... Iranian exports show a decline of more than 1 million barrels per day (bpd) as of October from May," said Edward Bell of Emirates NBD bank.