The United States is expected to announce on Monday that all buyers of Iranian oil will have to end their imports shortly or face sanctions, a source familiar with the situation told Reuters.
The source confirmed a Washington Post report that the US will terminate the sanctions waivers it granted to some importers of Iranian oil late last year.
In reaction to expectations of tightening supply, Brent crude oil futures rose by as much as 3.2 per cent to $US74.30 a barrel in early Asian trading on Monday.
US West Texas Intermediate futures climbed as much as 2.9 per cent to $US65.87 a barrel, its highest since October 30.
US President Donald Trump has been clear to his national security team over the last few weeks that he wants the waivers to end, and National Security Adviser John Bolton has been working the issue within the administration.
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In November, the US reimposed sanctions on exports of Iranian oil after President Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers.
Washington, however, granted Iran's eight main buyers of oil waivers to the sanctions that allowed them limited purchases for six months.
They were China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece.
But on Monday, Secretary of State Mike Pompeo will announce "that, as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate," the Post's columnist Josh Rogin said in his report, citing two State Department officials that he did not name.
An end to the exemptions would hit Asian buyers the hardest. Iran's biggest oil customers are China and India, who have both been lobbying for extensions to sanction waivers.
