The Trump administration is asking its international partners for a full halt on oil imports from Iran by November 4, saying non-compliance could lead to sanctions.
A State Department briefing on Tuesday confirmed that Washington is pushing to cut oil imports to zero. "We are not granting waivers," an official told reporters.
Instead, the Trump administration wants European, Asian and regional countries "to isolate streams of Iranian funding and is looking to highlight the totality of Iran's malign behaviour across the region," the official added.
President Donald Trump on May 8 withdrew the United States from a deal agreed between Iran and six world powers in July 2015 aimed at curbing Tehran's nuclear capabilities in exchange for the lifting of some sanctions.
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The state department official said he has met with European and Asian allies and will be returning to Europe this week. He has not, however, held talks with China, which is Iran’s largest oil importer – taking almost a quarter of its output (24 per cent) – followed by India, South Korea and Turkey.
"We are asking them to make a policy change, and the reason they are willing to do that in my view is because of their relationship with us," the official said, adding that those countries "genuinely understand that the secretary [Mike Pompeo] and the White House are not kidding about this maximum economic pressure campaign".
But removing Iranian oil from the global market by November, as called for by the United States, will not happen, an Iranian oil official told the semi-official Tasnim news agency on Wednesday.
"Iran exports a total of 2.5 million barrels per day of crude and condensate and eliminating it easily and in a period of a few months is impossible," the official said.
Iran is the third-largest exporter among the Organization of the Petroleum Exporting Countries (OPEC). Oil prices on Wednesday did not react strongly as traders had anticipated Washington's move and had largely priced it in.
A senior Revolutionary Guards commander, meanwhile, on Wednesday that it was the responsibility of all Iranians to help the government overcome economic problems.
"It is all of our duty to work together to help the respected government and other governmental branches in solving the economic problems," said General Yahya Rahim-Safavi, who is also a senior adviser to Iran's Supreme Leader Ayatollah Ali Khamenei.
"We must neutralise the plans of the enemy for an economic war and psychological operations."
The Iranian government is under domestic pressure, with a plunging rial currency sinking to a low of 90,000 against the dollar while living costs for the population continue to rise. The rial had recovered some ground on Wednesday and was trading around 78,500 to the dollar.
The protests in Iran have been sporadic since last December and have spread to dozens of cities.
Iran's President Hassan Rouhani accused the US on Tuesday of waging an economic war against his country.
Those comments came after Mr Trump on Monday claimed "a lot of progress has been made in the Middle East... and it really started with the end of the horrible Iran deal".