U.S. sanctions against Iran will ‘undoubtedly put upward pressure’ on the oil prices in the short run, and will be far more aggressive than the previous sanctions, which merely limited Iran’s oil exports by about 50 percent, a senior fellow in U.S. based think tank said on Sunday.

The sanctions would also push Brent oil prices towards $100 per barrel, Jacob Funk Kirkegaard at Peterson Institute For International Economics told Anadolu Agency, however, added “I am though skeptical that President Donald Trump will go that far.”

Following the U.S. withdrawal from Joint Comprehensive Plan of Action(JCPA), the first phase of the U.S. sanctions against Iran in August hit sectors like automotive, banking, and mining.

The second phase of sanctions, targeting Iran’s energy sector, shipbuilding, shipping and financial sectors is set to go into effect on Monday.

“In the long-run, in my opinion, since there is no chance that Iran will change policies, these sanctions will mean less oil supply and a higher global equilibrium price of oil, so [the sanctions] would be bad news for the global economy,” he said.

The global economy would depend completely on the willingness of other countries – especially the EU and China – to ignore the US sanctions and buy Iranian oil anyway, he said.

He also said that the main reason for the U.S. actions against Iran is Trump’s hatred of anything that the former President Barack Obama did.

“JCPOA is among Obama’s signature foreign policy successes – so Trump simply wants to sabotage it. Throw in his and the US evangelical community’s extreme support for the current right-wing Israeli government and you get the current policy mix,” he highlighted.

– European countries and trade

Kirkegaard said that European multinationals will exit Iran, as they will value their US operations more than any market opportunities in Iran.

However, many European small and medium-sized enterprises (SMEs) without a presence or sales in the US will likely try to continue to operate in Iran, he said.

Depending on the financial and logistical options available due to EU policies and new financial arrangements such as the new Iran special purpose vehicle (SPV), which will facilitate financial transactions, play a key role.

“So overall EU-Iranian trade could continue at a lower, but still relatively high level after the US sanctions. The key will be whether the EU will implement rules that insulate European refiners against US sanctions, so that imported Iranian oil may still be refined and sold on in Europe,” he said.

– China, Russia key for tackling sanctions

For 2018, the US sanctions against Iran’s oil exports is the crucial factor in the recent oil price increase, said Ann-Louise Hittle, Vice President of Macro Oils at Wood Mackenzie.

“Traders are reacting to the removal of over 1.1 million b/d of oil exports from the market as we head into the high winter demand season. Without the sanctions, we would have an oversupply in the second half of 2018,” she said and added that through the year, the prices increased $10 to $15 per barrel on this development.

The only operating companies in Iran are Chinese and Russian such as National Petroleum Corporation (CNPC), China Petroleum & Chemical Corporation (Sinopec) and JSC Zarubezhneft – a Russian state-controlled oil company, said Homayoun Falakshahi, senior research analyst Middle East upstream at Wood Mackenzie.

“However, CNPC and Sinopec have recently completed the projects they were involved in Azadegan North and Yadavaran in Iran respectively, and are receiving oil cargoes as re-payments. They now have the choice of looking for extensions of their previous contracts, or fully exit,” said Falakshahi.

Falakshahi explained that the China-Iran political relations are strong so these countries believe they will continue negotiating with National Iranian Oil Company (NIOC) over these two fields for their second development phase.

Zarubezhneft is also starting a project, for which the parties signed an agreement in March and the company has only exposure to Vietnam, so the imposition of sanctions will not have major impact on its project, he said.

“On the other side, European companies were in the front line to enter Iran. The re-imposition of US secondary sanctions against Iran is forcing them to retreat and abandon their plans for now,” he said.

“Indeed, companies which have some exposure to the US will need a waiver from to be able to invest more than $20 million per year in Iran’s energy sector. Total, which had signed a $4.9 billion contract to develop South Pars Phase 11, has indicated it has no choice but to exit the project,” Falakshahi concluded.

– Sanctions and Turkey

Turkey imports nearly half of its oil from Iran. For Ankara, geographical proximity facilitates oil trade from Tehran, however the country lowered its purchase volumes following the announcement of U.S. sanctions.

Turkish government held talks with U.S. on a possible waiver for the country’s ongoing oil and natural gas trade with Iran.

On Friday, Turkey’s Energy and Natural Resources Minister Fatih Donmez said that they have an information that Turkey will be granted waiver from the U.S. oil sanctions against Iran, but they don’t have all the details yet.

– US withdrawal from nuclear deal

Early in May, US President Donald Trump announced that he was pulling the United States out of the Iran nuclear agreement.

Trump announced he would exit the landmark JCPOA nuclear deal signed in 2015 with Iran and several other nations. The move was widely expected, and the White House immediately prepared to sanction Iran and companies that do business in Iran.

Last week, according to Treasury Secretary Steven Mnuchin, 700 Iranian entities will be added to sanctions lists on Monday.