Asia’s petroleum refiners are scrambling to find alternative supplies as they prepare for renewed US sanctions against major oil exporter Iran amid an already tight market, reported Reuters.

Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries (Opec) and a major supplier, especially to refiners in Asia.

The US plans to impose new unilateral sanctions after abandoning an agreement reached in late 2015 which limited Iran’s nuclear ambitions in exchange for removing joint US-Europe sanctions, which included strict curbs on crude oil exports.

Iran’s economy relies heavily on oil revenue. New US sanctions will include measures aimed at its petroleum and shipping sectors, with a six-month “wind down” period “to allow both US companies but foreign companies as well to end contracts, terminate business, (and) get their money out”, according to the US State Department.

Asian stocks closed slightly lower on Wednesday following the US pull out of the Iran nuclear deal, as oil prices rose to multi-year highs, reported CNBC.

Japan's Nikkei 225 declined 0.44 percent, or 99.81 points, to close at 22,408.88 as most sectors traded in negative territory, although gains were seen in the mining and banking sectors.

Elsewhere, South Korea's benchmark Kospi edged down by 0.24 percent to 2,443.98. Despite the benchmark's overall decline, gains were still seen in petroleum refiners, with SK Innovation up 1 percent. The junior Kosdaq jumped 2.86 per cent, it stated.

“President Trump is clearly articulating that he has minimal desire in an alternative agreement with Iran,” said Ehsan Khoman, head of research for Middle East and North Africa at Mitsubishi UFJ Financial Group.

The United States did not consult with businesses in making the decision to pull out of the deal.

“We haven’t talked to any private sector companies before the President’s announcement,” said a senior official in a background briefing by the U.S. State Department.

During the last round of sanctions, Iran’s oil supplies fell by around 1 million barrels per day (bpd), but the country re-emerged as a major oil exporter after sanctions were lifted in January 2016.

Since then, Iran ramped up supplies, producing 3.81 million bpd in March 2018, almost 4 per cent of global output. Its crude exports averaged over 2 million bpd in January-March quarter this year.

Analysts now expect Iran’s supplies to fall by 300,000 bpd to 1 million bpd, depending on how many other countries fall in line with Washington.