US move to end waiver on sanctions against importers of Iranian oil could hurt regional economies, analysts say.

The reaction from Asia’s top economies following the United States’ decision to not reissue waivers for Iran oil imports has ranged from cautious to combative.

On Monday, the US government told five countries – Japan, South Korea, Turkey, China and India – that they will no longer be exempt from US sanctions if they continue to import oil from Iran after their waivers end on May 2.

But those five countries are also the biggest customers of Iranian oil.

At the cautious end of the spectrum has been Japan. On Tuesday, its trade and industry minister Hiroshige Seko said the country expected a limited impact from the decision.

“We will closely watch international oil markets and exchange views with Japanese companies involved in crude imports and may consider taking necessary measures,” he said.

Cabinet Secretary Yoshihide Suga said Japan will “consider necessary steps to make sure that energy supply to Japan is not affected”.

Last November, the US reimposed sanctions on exports of Iranian oil following President Donald Trump’s move to unilaterally pull out of a 2015 accord between Tehran and six world powers to curb its nuclear programme.

Eight economies, including China, India and Japan were granted waivers for six months, and several had expected those exemptions to be renewed.

Ahead of Monday’s announcement in Washington DC, China was more forceful than its neighbours.

Its foreign ministry spokesperson Geng Shuang said China consistently opposed unilateral US sanctions against Iran. He added that China’s bilateral cooperation with Iran was lawful.

According to data from the US Energy Information Agency, China accounted for 24 percent of Iranian exports of crude oil and condensate, another fossil fuel, in 2017, making it Iran’s biggest energy customer.

Japan bought five percent.

Meanwhile, Turkey’s Foreign Minister Mevlut Cavusoglu said “the US decision to end sanctions waivers on Iran oil imports will not serve regional peace and stability, yet will harm Iranian people”.

“Turkey rejects unilateral sanctions and impositions on how to conduct relations with neighbours,” said Cavusoglu.

Iran’s other big oil customer in Asia is India which accounts for 18 percent of Iranian crude exports. Media reports said India has been increasing planned purchases from other sources in anticipation of the US move.

But South Korea has found it difficult to find alternative sources that match Iran’s quality and price, according to Al Jazeera’s Seoul correspondent Rob McBride.

“The South Korean government has been continuing talks with the US, while the South Korean business community has been lobbying for an extension beyond May 1,” he said.

Analysts say Asian economies that are reliant on oil imports will likely feel the effect of higher oil prices.

“Definitely, we will see some of that backlash from higher oil prices,” said Prakash Sakpal, Asia economist at ING, an investment bank.

“The impact will spread out to other commodity prices and (lead to) inflation pressure in the regional economies, and we should start seeing more of that in India, where inflation has already started picking up.”