OilPrice.com- The restoration of sanctions on Iran—the world’s fifth-largest oil exporter—may have implications for the market balance, the International Energy Agency (IEA) said in a statement on Wednesday, adding that it is closely following the situation.

“In recent months, oil market dynamics have been shaped by strong growth in demand, compliance by countries party to the Vienna agreement to cut output, and the crisis in Venezuela, leading to tighter overall market conditions. The restoration of sanctions on Iran, which exports 2.5 million barrels of oil a day and is the world’s fifth-largest exporter, may have implications for the market balance,” the IEA said in its brief statement today.

On Tuesday, U.S. President Donald Trump withdrew the United States from the Iran nuclear deal.

“The re-imposed sanctions will target critical sectors of Iran’s economy, such as its energy, petrochemical, and financial sectors. Those doing business in Iran will be provided a period of time to allow them to wind down operations in or business involving Iran,” President Trump said.

According to the Treasury factsheet, the U.S. will resume efforts to reduce Iran’s crude oil sales, with sanctions to be re-imposed following a 180-day wind-down period. Countries seeking exceptions “are advised to reduce their volume of crude oil purchases from Iran during this wind-down period,” the Treasury noted.

Analysts polled by S&P Global Platts expect an immediate impact of less than 200,000 bpd of Iranian oil shut in, possibly rising to 500,000 bpd after six months, as the deadline for sanctions to kick in nears. Yet, some analysts think that the reduction of Iranian exports could be closer to 1 million bpd.

The market had largely expected that President Trump would refuse to waive the sanctions on Iran this time around, and after an earlier dip on Tuesday, oil prices jumped after the announcement that the U.S. was walking away from the deal.

At 2:14p.m EDT on Wednesday, WTI Crude was surging 3.04 percent at $71.16, and Brent Crude was up 2.97 percent at $77.07.