The U.S. announced the sanctions in November but some countries got temporary waivers that allowed them to import Iranian oil.
Iran was exporting 2.5 million barrels of oil per day in April 2018, before Trump announced that the USA would be withdrawing from the Iranian nuclear agreement later in the year.
On Monday, the USA announced it will not extend sanction waivers for importers of Iranian oil when they expire in early May. The non-renewal of waivers that were due to expire on May 2 roiled energy markets and risks upsetting major importers including China and India. Iran's oil exports income is more than £38bn ($50 billion) a year, The Associated Press reported.
National Security Adviser John Bolton said in a tweet that "Coupled with the recent designation of the IRGC as a Foreign Terrorist Organisation, today's announcement should make the United States' resolve abundantly clear to Tehran".
Before the reimposition of sanctions a year ago, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries at around 3 million barrels per day (bpd), but April exports have shrunk to below 1 million bpd, according to tanker data and industry sources.
"There must be actual impact on the market and a real demand from customers", this source said, adding that any physical additional barrels by Gulf oil producers to compensate for a supply drop from Iran are unlikely to be seen until June.
Bernstein added that "higher oil prices will incentivize US production" to rise, after already hitting a record of over 12 million bpd this year. "And while there will be ample pressure from the White House for OPEC and non-OPEC countries to increase production, I don't think this is going to cause a reversal in the market in terms of sentiment".
In recent months, Saudi Arabia and other OPEC members have cut supply dramatically. "China has already lodged representations with the U.S. side about this". Turkey, another buyer, already has slammed the United States decision.
"We now have to look for the second-best instead", he said.
"China firmly opposes the US implementation of unilateral sanctions and its so-called long-armed jurisdiction", foreign ministry spokesman Geng Shuang said at a regular press briefing.
In India, refiners have started a search for alternative supplies but the government declined to comment officially. On Monday, the USA announced it would no longer honor that exemption.
It is also expected to come up during a visit to Washington this Friday by Japanese Prime Minister Shinzo Abe, which is expected to focus on North Korea and the challenge posed by China's rise.