Recently, the Trump administration has decided to end sanction waivers for countries buying Iranian oil. In an effort to put increasing pressure on the Iranian government, this decision will likely impact not only the Iranian economy, but global oil markets. Effective May 2, Washington’s decision will impact a wide range of countries — both allies and adversaries of the United States — including China, Greece, India, Italy, Japan, South Korea, Taiwan, and Turkey, and such a decision will most likely impact the economic growth of these oil-dependent countries.

In a White House statement delivered by White House Press Secretary Sarah Sanders, the administration stated, “This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue… The U.S., Saudi Arabia and the United Arab Emirates, three of the world’s great energy producers, along with our friends and allies, are committed to ensuring that global oil markets remain adequately supplied.”

Meanwhile, U.S. Secretary of State Mike Pompeo has informed reporters that the U.S., Saudi Arabia, and the United Arab Emirates are “working directly with Iran’s former customers.” He further declared that “we will no longer grant any exemptions — we’re going to zero.” To reassure the global oil market, Pompeo stated that Washington, Riyadh, and Abu Dhabi would “ensure an appropriate supply (of oil) for the markets.”

Among the most ardent supporters of the move is the recently-reelected Israeli Prime Minister, Benjamin Netanyahu. Indeed, Netanyahu had declared in a statement, “The decision of President Trump and the American administration is of great importance to increase the pressure on the terror regime of Iran. We stand by the determination of the United States against the Iranian aggression and this is the right way to stop it.”

On the other hand, other foreign governments have expressed dismay over Washington’s recent decision. Iran itself stated that it “did not and does not attach any value or credibility to the waivers.” Turkish Foreign Minister Mevlut Cavusoglu similarly tweeted, “The U.S. 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 neighbors.” Chinese foreign ministry spokesman Geng Shuang announced, “China-Iran co-operation is open, transparent and in accordance with law. It should be respected.”

As tensions between Washington and Tehran escalate, and global energy markets remain in deep suspense and uncertainty, whether or not both countries can resolve their differences, their relationship will not only affect Middle Eastern geopolitics, but also global economic growth — namely in Eurasia.

The closest comparison to the current situation that can be made is the 1973 oil crisis that significantly raised the price of oil and had been a contributing factor in the halting or slowing down of Western European and Japanese economic growth during the 1970s and 1980s. As two pillars of the global economy, the European Union and East Asia will be especially impacted by Washington’s decision. Thus, it is critical that Washington reassure countries in these regions where oil flows that oil prices will not be severely impacted, and that global economic growth will not be disrupted. Countries affected should also be persistent in voicing their concerns.

Ever since the Trump administration’s decision to pull out from the Joint Comprehensive Plan of Action in May 2018, tensions between Washington and Tehran have been simmering. Oil and nuclear weapons have not been the only issues of contention between the two countries. Iran’s activity in the Middle East — particularly in Syria’s civil war — has also been widely scrutinized by U.S. officials. Furthermore, in early April, the Trump administration designated one of Iran’s military branches, the Iranian Revolutionary Guard Corps (IRGC) as a terrorist organization. Collectively, such moves have worsened U.S.-Iran relations to a point perhaps only rivalled by the state of relations under the Ahmadinejad presidency and the 1979 Iranian Revolution.

With Washington-Tehran relations at such a perilous state, there is the question of whether there is hope for a recalibration. With both sides at loggerheads over these issues, and having fundamentally different visions of the Middle East, one may wonder if these long-standing adversaries can find common ground in providing stability for the region, as both countries are on opposite sides in both the Syrian and Yemeni civil wars. It is essential that they recognize the humanitarian cost of these conflicts on civilians, and work towards alleviating such suffering. Furthermore, they must ensure that their tit-for-tat mindset does not harm global peace and stability. And currently, the ball is in the court of both nations.