"Companies that buy Iranian crude oil must completely cut those exports by the start of November or else they will face powerful USA sanctions", a senior State Department official told reporters on Tuesday.
Some close US allies are among the largest importers of Iranian crude oil, including India and South Korea. The rial traded at 78,500 against the dollar in the unofficial market on Wednesday, according to foreign exchange website Bonbast.com. After all, if the choice is between doing business in the USA or Iran, doing business with the former is the overwhelming logical choice.
Despite widespread global opposition to the USA stance on Iran, analysts expect a significant reduction in exports from OPEC's third biggest producer, perhaps in excess of 1 million bpd.
"The U.S.is continuing its decision to completely isolate Iran", Gene McGillian, vice president of market research at Tradition Energy, told CNBC.
Asked if any waivers were expected to be granted in the process, the official said the position of the administration was that no exemptions would be permitted. I would be hesitant to say zero waivers ever.
Crude oil storage tanks are seen from above at the Cushing oil hub, appearing to run out of space to contain a historic supply glut that hammered prices, in Cushing, Oklahoma, March 24, 2016. This time, that may not be the case, as United States officials went on record to say they would not give out waivers to allies.
Ali Fazeli, the head of Iran's Chamber of Guilds, a business association, told the semi-official Tasnim news agency later on Monday: "Business is as usual in the Grand Bazaar". Asian oil buyers may be forced to turn to Saudi Arabia and Russian Federation. We have enough sugar, wheat, and cooking oil.
Iran's Supreme Leader demanded the judiciary punish those "who disrupt economic security" on Wednesday, following protests over the rial's collapse and a tightening of US sanctions pressure that has set the arch-foes further on a course of confrontation.
The US move has come on the day when Iranian President Hassan Rouhani said that US left the multilateral nuclear deal with Iran at a great cost, emphasising that Washington will fail to break the Iranian nation by resorting to "psychological" and "political" war. Reuters was not immediately able to confirm the report.
Tehran's sprawling Grand Bazaar has always been a center of conservatism in Iranian politics and remains an economic force within the country despite the construction of massive malls around the city.
The state-run IRNA news agency euphemistically referred to one incident Tuesday in which the city's metro line was temporarily shut down near the Grand Bazaar, saying it happened "because of some people gathered there".