A gas flare on an oil production platform in the Soroush oil fields is seen alongside an Iranian flag in the Gulf.

The United States sharply tightened energy sanctions against Iran on Thursday, seeking to cut the Islamic Republic's exports to zero and ushering in a new era of uncertainty for the oil market.

President Donald Trump restored Obama-era sanctions against Iran last year but granted waivers to eight nations, allowing them to import limited quantities of Iranian crude. Last week, his administration surprised the market by announcing it would not extend the waivers.

Investors and analysts expected Trump to tighten the waivers every six months, allowing China, India, Turkey and other importers to gradually wind down purchases of Iranian crude.

The sudden move to cut off Iran's exports threatens to wipe out much of the shipments, which have recently totaled more than 1 million barrels per day, or roughly 1% of global consumption. To fill that gap and prevent fuel costs from spiking, Trump has turned to his allies in Saudi Arabia, the world's top oil exporter.

Iran's oil buyers, source: S&P Global Platts

But the Saudis have not made firm commitments and continue to consider extending a six-month deal to limit output with OPEC and other producers. That is raising concerns about a period of tighter supply and higher oil prices.

"President Trump's decision to zero out waivers for importers of Iranian oil on May 2 represents an audacious act of oil brinkmanship as the strategy of keeping prices contained now rests almost exclusively on Saudi Arabia's willingness to open the taps amid accelerating global supply outages," Helima Croft, global head of commodity strategy at RBC Capital Markets, said in a recent research note.

Oil prices initially jumped to six-month highs after Trump announced the waivers would be revoked, with international benchmark Brent crude hitting $75.60 and U.S. crude rising to $66.60. Prices were trading around $71 and $62, respectively, on Thursday.