Oil prices surged about 3% at midday on Monday, hitting fresh 2019 highs, after the Trump administration announced that all oil buyers will have to end imports from Iran in just over a week or be subject to U.S. sanctions.

The administration said the State Department will cease granting sanctions waivers to any country still importing Iranian crude or condensate, an ultra-light form of crude oil, after May 2.

Brent crude, the international benchmark for oil prices, settled $2.07 higher at $74.04, rising 2.9% for its best closing price since Oct. 31, 2018. Brent rose as high as $74.52 per barrel around midday, sailing past last week's 2019 intraday peak at $72.27.

U.S. West Texas Intermediate crude futures settled $1.70 higher at $65.70, surging 2.7% to a nearly six-month closing high. WTI earlier rose as high as $65.92, the strongest level since Oct. 31, 2018. WTI had been trading sideways for about two weeks after peaking at $64.79 earlier in the month.

Crude futures first hit new 2019 highs following report by the Washington Post on the Trump administration's new policy.

The surprise move is driving the breakout in oil prices, said Michael Bradley, equity strategist at investment bank Tudor Pickering Holt.

"Crude markets were taken by surprise today as the Trump administration indicated it WON'T renew waivers that lets countries purchase Iranian oil without facing U.S. sanctions," he said in a research note. "Many expected that the US would take tougher action on the waiver front, but most DIDN'T expect an announcement of zero waivers."

The U.S. reimposed sanctions in November on exports of Iranian oil after U.S. President Donald Trump unilaterally pulled out of a nuclear accord struck in 2015 between Iran and world powers. Washington, however, granted eight of Iran's biggest oil buyers exemptions that allowed them limited purchases for an additional six months.

The eight buyers are China and India — Iran's biggest customers — as well as Japan, South Korea, Turkey, Italy, Greece, and Taiwan. The waivers have allowed Iran to continue exporting about 1 million barrels per day, down from roughly 2.5 million bpd last year.