By Jessica Donati and Courtney McBride 

WASHINGTON -- Oil prices surged to a nearly six-month high after the Trump administration said it would end waivers that allow countries to import Iranian oil, part of a U.S. campaign to deprive Iran of a major source of revenue.

Monday's swift market reaction, coupled with stern objections from at least two countries that will be adversely affected, ran counter to Trump administration assurances that its latest move against Iran would have relatively few broad international repercussions.

The administration last year withdrew from the 2015 international nuclear agreement with Iran and reinstated sanctions against Tehran, threatening punitive measures against countries that continued to purchase Iranian oil.

But Washington granted eight jurisdictions six-month waivers to continue to buy Iranian crude, giving them time to taper off the imports. The waivers expire May 2 and won't be renewed, the administration said Monday.

"We're going to zero -- going to zero across the board," said Secretary of State Mike Pompeo.

Mr. Pompeo said the administration's goal is to deprive Iran of the funds it uses to support its expanded influence in the Middle East. So far, sanctions have deprived the regime of more than $10 billion in oil sales, he added.

Oil prices reacted immediately, with the global benchmark price surging above $74 a barrel, a nearly six-month high. Rising oil prices could exert upward pressure on gasoline prices.

Mr. Pompeo said the U.S. had received assurances that Saudi Arabia and the United Arab Emirates would help keep the world market adequately supplied, and that U.S. production increases also would play a role.

Saudi Arabia declined to commit to increasing oil output on Monday. The kingdom's energy minister, Khalid al-Falih, said it would coordinate with other oil producers to keep the market balanced. Neither U.S. nor Saudi officials have said what price level reflects a balanced market.

A senior Trump administration official, asked about the oil-price surge, said global crude markets had expected the waivers to continue. But the official said the price increase would prompt producers to boost supply to replace the Iranian oil. The official added that U.S. oil production capacity had risen enough over recent years to compensate for the loss of Iranian oil.

Global oil supply tightened this year after the loss of oil from Iran and Venezuela, which also has been targeted by U.S. sanctions. The latest outbreak of chaos in Libya, another major oil producer, has added to uncertainty over supply.

The White House announcement drew an angry response from China and Turkey, two countries that have been Iran's major customers and held U.S. waivers. Both had expected to receive extensions to continue to import Iranian oil.

"China consistently opposes U.S. unilateral sanctions and long-arm jurisdiction," Geng Shuang, a spokesman for China's Foreign Ministry, said Monday. "China-Iran cooperation is open, transparent and in accordance with law, it should be respected."

The Turkish government said the U.S. move would harm the Iranian people and fuel tension in an already volatile region. The decision "will not serve regional peace and stability," Turkey's foreign minister, Mevlut Cavusoglu, said in a tweet. "Turkey rejects unilateral sanctions."

Last year, Turkish President Recep Tayyip Erdogan said his country would ignore the U.S. embargo on Iranian oil, but Turkish business leaders generally said they would comply to avoid getting caught in U.S. crosshairs.

In India, another purchaser of Iranian oil, the Ministry of External affairs declined to comment Monday. Cutting Iranian imports would be difficult, but New Delhi is likely to abide by U.S. sanctions rules and seek alternative oil sources, a top official in Prime Minister's Narendra Modi's office said.

The other jurisdictions that hold expiring waivers are Greece, Italy, Taiwan, Japan and South Korea. Greece, Italy and Taiwan are believed to have eliminated imports from Iran. South Korea and Japan didn't immediately respond to requests for comment.

An Iranian foreign ministry spokesman called the U.S. threat of sanctions "basically illegal," according to the semiofficial ISNA news agency. Iran, like Turkey, maintains that unilateral sanctions by one country are invalid.

The U.S. decision could threaten Saudi exports as well. A commander in Iran's hard-line Islamic Revolutionary Guard Corps vowed Monday to interrupt the flow of oil through the Persian Gulf's Strait of Hormuz -- the route used for most shipments from Iran and Saudi Arabia.

"If we are barred from using [the Strait,] we will close it," IRGC Naval Forces commander Alireza Tangsiri told Iranian state TV network Al Alam. "We will defend our honor and wherever it comes to defend Iran's rights, we will retaliate."

The senior administration official warned Tehran against threatening to close the Strait of Hormuz. "They should know that's something we would find unacceptable," the official said, without elaborating.

While U.S. sanctions have hurt Iran's economy and strained the government's budget, they haven't led Tehran to pull away from its military role in Syria in support of President Bashar al-Assad or scale back its paramilitary role in the region, both U.S. goals.

Mr. Pompeo said the U.S. would allow no waivers after the current round expires May 2, but didn't rule out the possibility of limited exemptions. "I think we've always been very fair about this -- if there is a particular transaction that is incidental -- all right, so I don't want to foreclose the possibility, but there will be no waivers," he said.

Iran is on track to be a foreign-policy issue in the run-up next year's U.S. presidential election. Some Democratic candidates pledge to return to the 2015 nuclear accord that aimed to curtail Iran's nuclear program in exchange for relief from international sanctions.

Mr. Trump's withdrawal from the pact with Iran and six major powers last year undid a flagship foreign policy effort of President Obama.

The decision to end oil waivers comes after months of pressure by Republican hawks. Senator Ted Cruz (R., Texas) on Monday praised the move in a statement calling for the Trump administration to take further steps to curb Iran's finances.

"The administration should also take the long overdue step of ending civil-nuclear waivers, which allow the Iranians to continue nuclear-related work," Mr. Cruz said.

The Trump administration has outlined 12 demands on Iran, which include Tehran giving up its right to enrich uranium, which it retained under the 2015 agreement; cease its support for militant groups such as Hamas; and stop issuing threats against Israel.

Mr. Pompeo said Monday the U.S. would be open to talks with Iran once the country's leaders agreed to meet the list of demands.

--Benoit Faucon, Summer Said, Aresu Eqbali and Timothy Puko contributed to this article.

Write to Jessica Donati at jessica.donati@wsj.com and Courtney McBride at courtney.mcbride@wsj.com

(END) Dow Jones Newswires

April 22, 2019 19:46 ET (23:46 GMT)

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