Secretary of State Mike Pompeo speaking at the 2019 CERAWeek in Houston Texas on March 12, 2019. Mary Catherine Wellons | CNBC

The Trump administration will sharply accelerate its goal of driving Iran's oil exports to zero, ending sanctions exemptions that it previously granted to some of the Islamic Republic's biggest customers. President Donald Trump unilaterally withdrew from a 2015 nuclear accord with Iran last May and restored wide-ranging sanctions on the Iranian economy in November. At the time, his administration granted six-month waivers to eight countries that allowed them to continue importing limited quantities of crude oil from Iran. The market widely expected Washington to extend the waivers for five of the countries. However, the administration says that any country still importing oil from Iran will be subject to U.S. sanctions beginning on May 2. "President Donald J. Trump has decided not to reissue Significant Reduction Exceptions (SREs) when they expire in early May," the White House said in a statement. "This decision is intended to bring Iran's oil exports to zero, denying the regime its principal source of revenue." The Trump administration is trying to force Iran to the negotiating table. Last year, it laid out 12 demands that Iran must meet before the U.S. lifts sanctions. The list asks Iran to accept new limits on its nuclear program, end ballistic missile tests, cut off support for U.S.-designated terror groups and free U.S. citizens held in detention.

"With the announcement today, we've made clear our seriousness of purpose," Secretary of State Mike Pompeo said during a press conference on Monday. "We are going to zero. How long we remain there, at zero, depends solely on the Islamic Republic of Iran's senior leaders. We've made our demands very clear to the ayatollah and his cronies." The decision to stop issuing sanctions waivers threatens to wipe roughly 1 million barrels per day off the market at a time when analyst say oil supply is already tightening. Crude futures spiked to nearly six-month highs on news of the policy, which was first reported Sunday by The Washington Post. The Trump administration will work with Iran's regional rivals Saudi Arabia and the United Arab Emirates to offset the drop in Iranian supplies, the White House said. The Saudis and Emiratis are currently partnering with their fellow OPEC members and several other oil producing nations, including Russia, to limit oil supplies. The so-called OPEC+ alliance has been trying to keep 1.2 million bpd off the market since January, following a collapse in oil prices in the final months of 2018. The White House statement suggests the group will soon reverse course and hike output.