As Iran is turning to the UN's International Court of Justice to have the US-imposed sanctions against its oil suspended, the EU is preparing for the hit its economies will have to absorb once the full weight of Washington's punitive measures comes into effect in the fourth quarter of this year.

With these latest moves, American intentions are clear: cut off Iranian oil from the market entirely and reduce Tehran's financial power.

As oil prices rise, however, the White House's policy looks set to hurt more countries than just Iran. Will Europe's economies take the hit – or will they fight back?

Iran is the world's third largest oil producer within OPEC (after Saudi Arabia and Iraq) with a daily production of 4 million barrels. Currently, major economic regions from North America to Europe and East Asia are witnessing growing economic activity, causing global oil consumption in 2017 to rise by 1.5 million barrels per day, further tightening the market. As Tehran has already warned, OPEC capacity will be unable to meet shortfalls if the US pursues its policy of reducing Iranian oil exports to zero.

The risk is that any constraints on Iran's exports will only further drive up prices and create major headwinds for the economy of major oil consumers. By law, the US must ensure the global oil market is well-supplied before issuing sanctions on Iranian oil exports. But in light of current demand, this might be a tough argument to land – especially since more oil supply shocks can be expected: Venezuela is struggling, and an agreement between OPEC and Russia is curbing daily oil production by 1.8 million barrels, compared to 2017 levels.