Oil jumps after USA abandons Iran deal, plans 'highest level' sanctions

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Iran, which pumps about 4 percent of the world's oil, exports about 450,000 barrels per day (bpd) to Europe and around 1.8 million bpd to Asia.

Ignoring pleas by allies, US President Donald Trump on Tuesday pulled out of an worldwide nuclear deal with Iran that was agreed in late 2015, raising the risk of conflict in the Middle East and casting uncertainty over global oil supplies.

The foreign minister said the commitment of other partners to the Iran deal should be respected.

"Iran's exports of oil to Asia and Europe will nearly certainly decline later this year and into 2019 as some nations seek alternatives in order to avoid trouble with Washington and as sanctions start to bite", said Sukrit Vijayakar, director of energy consultancy Trifecta.

Inventories at Cushing, Oklahoma, the delivery point for US crude futures, fell about 410,000 barrels between May 8 and May 11, said traders, citing data from market intelligence firm Genscape.

He said the effects of the U.S. move were already being felt in rising oil costs and an increase in political uncertainty in the Middle East.

He said France would propose sanctions-blocking measures to the European Commission in the next few days.

In 2015, Iran, China, France, Germany, Russia, United Kingdom, United States, and the European Union created the JCPOA, under which global sanctions on Iran would gradually be lifted in exchange for Tehran maintaining the peaceful nature of its nuclear program.

Germany plans to offer legal advice to help its firms continue to do business in Iran, Economy Minister Peter Altmaier also said on Friday.

Which companies could be affected?

What is the political "uncertainty" Mr Le Drian talks of?

Israel said its fighter jets then struck 70 military targets belonging to Iran inside Syria. Dubai's billion dollar trade with Iran, as exports to Iran are worth about 5% of its GDP was at risk according to Reuters, and the stock exchange lost 2% following the news.

Bolton said Europe was still digesting Trump's move last week.

On Thursday, US individuals and entities were barred from doing business with six Iranian individuals and three companies Washington says have ties to the Revolutionary Guards.

United States treasury secretary Steven Mnuchin said: "The Iranian regime and its central bank have abused access to entities in the UAE to acquire U.S. dollars to fund the IRGC-QF's malign activities, including to fund and arm its regional proxy groups, by concealing the goal for which the USA dollars were acquired".

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