The Trump administration has imposed draconian sanctions on Iran and vowed to punish any company in the world that flouts the embargo, asserting universal jurisdiction against bitter protests from Europe.

“I promise you that doing business in Iran in defiance of our sanctions will ultimately be a much more painful business decision than pulling out of Iran,” said Mike Pompeo, the US Secretary of State. Violators will face “swift and severe" penalties.

Washington aims to shut down the country's crude exports almost entirely within months, risking a global oil crunch at a time when emergency spare capacity is already at the lowest level since the creation of the modern oil markets. “Our goal is to reduce Iranian exports to zero as soon as possible,” said the US Treasury.

There will be partial "waivers" for China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece, giving them more time to wean themselves off Iranian crude supplies, but the most of the shock hits immediately.

“It is still a massive drop in global supply,” said David Fyfe, former chief oil analyst for the International Energy Agency. “I am afraid that if crude prices go durably above $100 it will push the world into recession, given all the issues in emerging markets right now.”