Saudi Arabia immediately pledged to help offset the loss of Iranian crude, saying it “remains committed to supporting the stability of oil markets, benefiting producers and consumers alike.” Analysts also expect that U.S. companies will respond to higher prices by drilling more.

Analysts say oil prices are already high enough to cause a drag on the economy.

“An oil price increase is a hit to consumers in the form of higher gasoline prices, which means weaker spending on other items,” said Gregory Daco, chief U.S. economist at Oxford Economics. “The key question going forward will be what happens to oil production in Saudi Arabia,” one of the few countries capable of offsetting lost Iranian production.

Mnuchin told reporters that the Trump administration has talked to “various parties” who would be willing to provide enough oil to offset Iran. He did not name the countries.

In other sectors, French carmaker PSA Peugeot Citroen agreed in 2016 to open a plant producing 200,000 vehicles annually in Iran, and says it is studying the implications of the U.S. move. Fellow automaker Renault signed a $778 million deal to build 150,000 cars a year at a factory outside of Tehran but has declined to comment so far.

German industrial equipment manufacturer Siemens, which has multi-billion-dollar contracts with Iran for rail, power plant and other projects, said it is assessing the possible impact but expects it to be immaterial. It said it will comply with any sanctions.

Companies and countries with commercial deals with Iran would have either 90 or 180 days to wind down those activities, depending on the sector and type of products sanctioned. Firms would not be allowed to strike new deals with Iran.

U.S. officials said certain waivers can be negotiated, but they did not say what goods or countries might qualify.

Most of the companies should be able to withstand the loss of deals in Iran. PSA Peugeot Citroen, for example, sold more than 3.6 million vehicles worldwide last year.

Closer ties with Europe have helped Iran. Exports to the EU grew almost tenfold since the sanctions were lifted, from 1.25 billion euros ($1.48 billion) in 2015 to 10.14 billion euros last year. The flow of goods to Iran grew more modestly, from 6.47 billion euros to 10.8 billion euros.


Koenig reported from Dallas and Charlton from Paris. Martin Crutsinger in Washington, D.C., Jon Gambrell in Dubai, Frank Jordans in Berlin, Raf Casert in Brussels and Matt Ott in New York contributed to this report.

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