US President Donald Trump's announcement on Tuesday that the US will withdraw from the landmark 2015 accord has sparked worries about fresh tension in the Middle East, sending oil prices to a three and a half year high.

US West Texas Intermediate (WTI) futures traded at $70.72 (€59.79) per barrel, up 2.3 percent and near Monday's peak of $70.84 — the highest level since November 2014. Futures for North Sea Brent crude jumped as much as 2.5 percent, also hitting a three-year high.

Read more: Opinion: Trump's Iran nuclear deal exit dangerous for the world

Iran is the third-biggest producer among the Organization of the Petroleum Exporting Countries (OPEC), producing about 3.8 million barrels per day (bpd), or about 4 percent of the world's oil supplies.

"In the very short term, it looks as if the impact of heightened geopolitical worries was limited to oil markets. But that is not the end of the story," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "US sanctions could affect various industries...and will begin to cap share prices," he added in a note to investors.

Under new Iran policies, US sanctions will be reinstated after "wind-down periods" of 90 or 180 days, allowing for companies from across the world to close existing deals with the Iranian Central Bank and Iran's financial sector, as well as with companies in the oil industry, shipping and other economic pressure points.

But Trump also made clear he expected to achieve a new deal that lifts the penalties. "The fact is they are going to want to make a new and lasting deal, one that benefits all of Iran and the Iranian people," Trump said. "When they do, I am ready, willing and able."

Sanctions regime

In a first step, companies must wind down holdings of Iranian sovereign debt or Iranian currency by August 6.  By that date, any person or company that assists the Iranian government with acquiring or purchasing US dollar banknotes will be subject to sanctions.

Re-imposed by that date will also be sanctions targeting Iran's trade in gold and other precious metals, graphite and coal, metals such as aluminum and steel, the country's automobile sector and luxury products such as Iranian-origin carpets and caviar.

In a second phase, starting November 4, sanctions against Iran's oil industry will be reinstated, including penalties against foreign financial institutions that conduct significant transactions with the Central Bank of Iran.

On top of that, the US is targeting petroleum-related transactions, punishing companies doing business with Iranian oil firms such as National Iranian Oil Company, Naftiran Intertrade Company, and National Iranian Tanker Company.

The US advised countries that want to avoid sanctions to reduce their volume of crude oil purchases from Iran during the wind-down period. US Treasury Secretary Steven Mnuchin said in a briefing that companies can request waivers or special licenses to avoid sanctions, and they'll be determined on a case-by-case basis.

However, the US ambassador to Germany, Richard Grenell, said companies shouldn't hold out much hope for waivers unless Iran agreed to a new deal. "German companies doing business in Iran should wind down operations immediately," he tweeted on Wednesday.

Deals on the line

Grenell's tweet invited strong criticism from Germany on Thursday. Michael Tockuss, managing director of the German-Iranian Chamber of Commerce, quipped that the newly-inaugurated American ambassador still had to "find his role" on the job. "I'm convinced the German Foreign Office will point out to him that it's not his job to threaten German companies or advise them about what to do," he said in a statement.

Read more: Iran nuclear deal: Germany's special role and plans

Germany is Iran's biggest trading partner in Europe, although bilateral goods exchange was negligible with a volume of only €3.5 billion last year. Nevertheless, hopes for rising trade after Iranian sanctions were lifted in 2015 were dimming after Trump's decision, said the president of the German Chambers of Commerce and Industry, Holger Bingmann.

"Companies are concerned that the new sanctions imposed on Iran will also affect their business with the United States [because] European firms risk being punished by the US, too, should their partners in Iran included in the sanctions list," he said.

A senior member of the German mechanical engineering association, VDMA, was more defiant in his reaction to the new US policy, urging German companies to comply with their contractual obligations in spite of the sanctions.

"From a strictly legal point of view, you cannot resolve a contract under German law because of US sanctions, So they have to stick to their contracts and need to discuss with their business partners if they want to continue or not," Klaus Friedrich told DW.    

Trump's announcement will also scuttle many billion-dollar US deals. The US Treasury has already said it would revoke a $3-billion deal signed by aircraft maker Boeing, for example, which wanted to sell 30 Boeing 737 Max planes to Iran's Aseman airline and a $16.6-billion contract with national carrier Iran Air for 80 aircraft.