So, what happens next?
"I will never forget the dark cloud that hung over the White House in the years Iran was advancing nuclear program & Obama was briefed on all the risks of using military force", former United Nations Ambassador Samantha Power tweeted. Previously, Donald Trump called the US-Iran nuclear deal to be a "disaster".
Just three days after pulling out of the Iran nuclear deal the U.S. has begun to make good on Donald Trump's promise to increase sanctions against Tehran. Their goal in 2015 was to recover some of the cash USA officials had been holding for years, since the revolutionary Islamic regime took power.
The 2015 agreement, which was negotiated by the Obama administration and included Germany, France and Britain, had lifted most US and global economic sanctions against Iran. The EU, China and Russian Federation have said they are sticking with the deal. European Union foreign policy chief Federica Mogherini said pulling out of the Iran nuclear deal was not a decision that could be taken exclusively by the U.S. They are talking about how they can protect their companies from American sanctions, and how they might retaliate.
The escalation in geopolitical tensions in the Middle East, resulting from Israel and the United States upping the ante against Iran, will likely keep oil prices buoyed, even if sanctions are not implemented by other countries.
In quitting the Iran nuclear deal President Donald Trump cast aside years of painstaking diplomacy and took the USA stand-off with Iran into risky new territory.
As a result of the new USA sanctions, companies worldwide must stop doing business with Iran or risk US fines or other punishment.
The U.S. has advised other countries to "significantly reduce" their purchases of oil from Iran.
Trump, who repeatedly criticized the accord during his presidential campaign, said Tuesday that documents recently released by Netanyahu showed Iran had attempted to develop a nuclear bomb in the previous decade, especially before 2003.
In the lead up to the announcement, Foreign Secretary Boris Johnson appeared on Fox News, Mr Trump's favourite station, to make the case for sticking with the landmark agreement, signed during the administration of predecessor Barack Obama. The Europeans were not willing to break a provision baked into the deal, and noted that Iran, Russia and China - also parties to the deal - would adamantly refuse.
"With stocks falling quickly during the course of the next 18 months, we would expect continued upside pressure on crude oil prices and see Brent averaging $US75 a barrel in 2019 compared to $US70 a barrel this year", BoA analysts said.
"So there will be a wind-down period of those sanctions but we're going to be pressing ahead with the President's goal of having a new deal". The sanctions will not only bar US companies from doing business with Iran, but they also will hurt foreign companies by prohibiting them from using American banks unless they cut links with Iran. Both the IEA and Saudi Arabia issued statements saying they will monitor the status of the oil market and step in if a shortage materializes.
"The impact (of new sanctions) in India will be there, but not so high", said R Ramachandran, head of refineries at state-owned oil firm Bharat Petroleum Corp.
A lot depends on what Iran does next. France's BNP paid a almost $9 billion fine in 2014, for violating USA sanctions against Iran, Cuba and Sudan.
Mr Trump's decision to reinstate oil sanctions could not have come at a worse time for consumers but a good time for the market. In different circumstances - after negotiations, after obtaining proof that Iran was in violation of the deal - it might have been possible to recreate the global coalition that imposed sanctions so successfully in the first place.
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