The fresh round of sanctions the U.S. imposed on Iran Monday threatens to close off all channels of international banking to the regime, but is unlikely to affect Canadian businesses.

The sanctions aim to block Iran's oil exports, but the impact on oil prices may have already worked its way through the markets, though there could be some volatility in the months ahead.

And how effective the sanctions will be in cutting off Iran economically will depend on how strongly the U.S. imposes punishments on companies and countries that continue to do business there, according to Ian Lee, an expert in international trade and associate professor at Carleton University's Sprott School of Business in Ottawa.

U.S. Secretary of State Mike Pompeo, left, and Treasury Secretary Steven Mnuchin, present details of the new sanctions on Iran in Washington on Monday. (J. Scott Applewhite/Associated Press)

As of Monday, U.S. Secretary of State Mike Pompeo said all of the sanctions lifted under Iran's 2015 nuclear deal with world powers had been reimposed, including cutting links from Iran to the international banking system.

Pompeo said the sanctions have already cost Iran the sale of more than one million barrels of crude a day, as countries around the world sought new sources of oil.

"Our objective is to starve the Iranian regime of the revenue it uses to fund violent and destabilizing activities throughout the Middle East and, indeed, around the world," Pompeo said. "The Iranian regime has a choice: It can either do a 180-degree turn from its outlawed course of action and act like a normal country, or it can see its economy crumble."

Waivers on sanctions for 7 countries

But also on Monday, the U.S. announced that eight trading partners would be granted waivers to continue buying oil from Iran — China, Greece, India, Italy, South Korea, Taiwan and Turkey.

This may be a strategy to appease those trading partners and allow them time to develop new sources of oil, but it also may have been done with an eye of the impact on oil prices, Lee said.

"They don't want to do something too draconian and upset stability in the international oil markets," he said.

The prospect of sanctions has been hanging over the markets and may have worked itself out in September, when the price of the Brent futures contract for oil spiked above $85 US a barrel.

Oil prices have retreated since then, as the world's largest oil producers stepped up production, says TD economist Omar Abdelrahman.

Russia, Saudi Arabia and especially the U.S. have boosted output to replace any North American reliance on Iranian oil, he said.

On Monday, Brent crude rose as high as $74.13 US a barrel in morning trading, but ended the day down two cents at $73.40.

Expect oil price volatility

Abdelrahman expects some oil price volatility in coming months.

But when the Organization of Petroleum Exporting Countries (OPEC) meets in December to agree on new production levels, he anticipates its members will have moved to take market share from Iran.

The wild card, he says, is how long the U.S. maintains those exemptions for the eight buyers of oil from Iran. Currently, they're set to last 180 days.

Even if those customers look elsewhere for oil, it's not likely to do anything for Canadian producers, he said. "Most of our oil goes to the U.S. Canada doesn't have the market dynamics to sell to India or China."

Lee says the exemptions will "mitigate the impact of sanctions" on Iran.

"The U.S. wants to isolate Iran. Since 1979, Iran has been their biggest enemy and they've been on the side of the Saudis," he said.

"But they don't want to destroy the economy, just weaken it."

Few Canadian businesses have rushed into Iran since the lifting of sanctions after Iran signed on to the international deal to halt its nuclear program, Lee said. He says the impact on Canadian business will be "minimal."

Even as sanctions lifted, there were whole trade sectors, such as weapons, where Canada was still constrained from doing business because of NATO rules, he said.

A U.S. navy soldier stands guard as an oil tanker makes its way toward Bahrain port, during an exercise in the Arabian Sea on Sept. 18. (Hamad I Mohammed/Reuters)

This round of sanctions comes with a threat from the Trump administration to punish international companies that try to get around them. And the U.S. has the clout to do that.

"The biggest weapon the U.S. has is its domination of the international financial system," Lee said. "They can cause great damage to anyone if they choose to implement it."

EU says it will help companies do business

The other signatories to the international nuclear deal — Britain, France, Russia, China, Germany and the EU — still say they want to save it.

The European Union has said it will help its businesses get around U.S. sanctions and continue to trade with Iran. Italian and German business are among those that took advantage of the lifting of sanctions to increase their ties with Iran.

The EU's pledge may be political spin, Lee says.

"I don't see how they will get around the sanctions if the U.S. goes after them," he said.

But how effective sanctions will be depends on the extent that the U.S. really cracks down, he said.

"It really depends on Trump."