Photo: Saul Loeb/AFP/Getty Images

Crude prices hit their highest levels in well over three years Wednesday morning after President Trump's decision to bail on the Iran nuclear deal and to reimpose energy sanctions after a 180-day wind down.

By the numbers: WTI crossed $71 per barrel for the first time since late 2014, while Brent crude went above $77. This morning had WTI trading at $71.04 and Brent at $77.13.

The intrigue: The market moves come just a day after Treasury Secretary Steve Mnuchin said he did not expect price hikes.

  • Per Reuters and other outlets, he also told reporters there have already been conversations with "different parties" willing to increase supply.

The Saudi response: In a widely circulated statement yesterday, Saudi Arabia said it would "work with major producers within and outside OPEC as well as major consumers to mitigate the impact of any potential supply shortage."

  • The kingdom welcomed Trump's decision to abandon the nuclear accord with its regional rival.

Quick take: U.S. and Saudi interests are only aligned up to a point. Higher crude and hence gasoline prices could hit Republicans politically.

But the Saudis, for domestic financial reasons, probably want higher prices — Bloomberg reported last month that they're targeting $80. The goal could be even more.

  • Go deeper: This Bloomberg piece last night looked at how the kingdom could navigate the post-Iran deal landscape.

Known unknowns: One of them is how many Iranian barrels come off the market in the short- and long-term.

  • A Treasury Department document released with the announcement said the U.S. will press buyers of Iranian crude to reduce their purchases even during the wind-down period.
  • S&P Global Platts reports that most analysts they've surveyed see an immediate effect of less than 200,000 barrels per day and less than 500,000 b/d after the 6 months. "But some analysts see the move eventually disrupting as much as 1 million b/d of oil supply."

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