European Union nations have agreed to slap an oil embargo against Iran's oil exports
File photo of the Lavan oil refinery off the south coast of Iran. European Union nations agreed Monday to slap an oil embargo against Iran's oil exports in a bid to halt funding of the country's disputed nuclear programme, EU diplomats said. © Behrouz Mehri - AFP/File
European Union nations have agreed to slap an oil embargo against Iran's oil exports
Last updated: January 23, 2012

EU agrees on embargo on Iranian oil exports

The EU slapped an embargo on Iranian oil Monday in tough new sanctions aimed at blocking funds for Tehran's suspect nuclear drive and reviving stalled talks, as Iran slammed the move unfair.

The oil ban, along with sanctions against Iran's central bank and other measures, came as western powers rounded on Tehran to return to negotiations amid concerns it is inching ever closer to building a nuclear bomb.

As Iran furiously denounced the unprecedented European Union measures, the United States further tightened the noose, announcing sanctions against Iran's state-owned Bank Tejarat, one of the few still accessing the international financial system.

"The method of threat, pressure and unfair sanctions against a nation that has a strong reason for its approach is doomed to fail," said foreign ministry spokesman Ramin Mehmanparast.

The hawkish government of Iran's arch-foe Israel appeared reassured but Tehran's ally Russia warned "unilateral sanctions" could be counter-productive, preventing Iran "from making any concessions or corrections."

"You can be sceptical about sanctions but it's better than making war," said French Foreign Minister Alain Juppe.

Piling on the pressure from Europe, the leaders of France, Germany and Britain in a move separate from the sanctions urged Iran's leaders "immediately to suspend its sensitive nuclear activities".

"Today's sanctions show how serious EU member states are about preventing nuclear proliferation and pressing Iran to return to the negotiating table," said British Foreign Secretary William Hague.

"Iran continues to defy UN resolutions and enriches uranium to 20 percent for which there is no civilian explanation," Hague added at talks with counterparts from the 27-nation bloc on the sanctions.

After weeks of fraught talks on an embargo which could hurt debt-straddled European Union nations, the ministers agreed on an immediate ban on oil imports and a gradual phase-out of existing contracts between now and July 1.

They also froze the assets of Iran's central bank "while ensuring that legitimate trade can continue under strict conditions", a statement said.

In the toughest action yet against Iran's ability to fund its nuclear programme, the EU outlawed petrochemical imports and investments and banned the sale of gold, diamonds and other precious metals.

Global powers involved in negotiations on Iran's nuclear programme are still waiting for Tehran to come forward and resume talks left in limbo since January last year, said EU foreign policy chief Catherine Ashton.

"The pressure of sanctions is designed to try and make sure that Iran takes seriously our request to come to the table," she said.

"Iran has the opportunity to come forward not just to talk, but to have some concrete issues to talk about," she added. "It is very important that it is not just about words: a meeting is not an excuse, a meeting is an opportunity."

The UN's International Atomic Agency confirmed Monday that a high-level visit to Iran would take place from January 29-31 for talks on Tehran's nuclear activities.

With tensions running high after Iran threatened to close the Strait of Hormuz, the US aircraft carrier USS Abraham Lincoln passed through the vital oil transit route on Sunday, joined by British and French navy ships.

The EU is Iran's second largest oil customer after China.

The potential impact on economically troubled EU nations heavily dependent on Iranian oil, Greece, Spain and Italy, as well as on the global oil market -- where oil prices rose on news of the embargo -- will be reassessed by May 1.

Greece's dependence in particular held up an accord on the embargo as the debt-hit nation relies on Iran for more than a third of its imports and had struck preferential financial terms with Tehran.

Greece initially wanted a transition period of up to a year, and intensive talks have taken place for weeks to find alternative sources.

"Our sacrifice is really major," said Spain's Foreign Minister Jose Manuel Garcia Margallo, though he reported that alternatives had been found. "We want to show our support to peace and stability."

The EU has already frozen the assets of 433 firms and 113 individuals, as well as restricting trade and investment in the oil and gas industries.

The bloc imported some 600,000 barrels of Iranian oil per day in the first 10 months of last year, making it a key market alongside India and China, which has refused to bow to pressure from Washington to dry up Iran's oil revenues.

"The embargo mustn't take place solely in the EU, in the West," said Germany Foreign Minister Guido Westerwelle. "For the message to the Iranian regime to be clear it needs more than a western voice, it needs an international voice."

Some 65 percent of Iranian exports go to Asia.

In Europe, Iranian oil accounted for 34.2 percent of Greece's total oil imports, 14.9 percent of Spain's and 12.4 percent of Italy's in the first nine months of last year, according to the latest EU statistics.

The bloc thus has been seeking new suppliers able to match the attractive conditions offered by Tehran. Contacts are under way with Saudi Arabia and hopes are high that Libya can soon increase its production.

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