EU agrees Iranian oil embargo

The European Union banned imports of oil from Iran today and imposed a number of other economic sanctions, joining the United States in a new round of measures aimed at deflecting Tehran's nuclear programme.

At a meeting of foreign ministers in Brussels, attended by Tánaiste Eamon Gilmore, EU governments also agreed to freeze the assets of Iran's central bank and to ban all trade in gold and other precious metals with the bank and other public bodies.

“Here we’re dealing with an undisputed fact that Iran is militarising its nuclear set-up. There is no argument about the threat that that poses,” Mr Gilmore said after the decision was announced.

He added the impact on the price of oil as a result of the embargo was examined but said there was no doubt the ban would have an impact on Iran as anxiety over the nuclear initiative intensifies.

“The European market is a very big market for Iran,” he said. “What we have to prevent first of all is something very dramatic happening like an Israeli intervention, that would be hugely serious and would be very destabilising and it is something we want to prevent.

“The purpose of the embargo is to bring Iran to the negotiating table and sanctions and embargoes are the way that adds weight and gives clout to the diplomatic effort that is under way in any event.”

Although Israeli prime minister Benjamin Netanyahu welcomed the EU intervention, he said it was unclear whether it would result in a breakthrough. “I think this is a step in the right direction,” he said at a meeting of his Likud faction in parliament. “For now, it is impossible to know what the result of these sanctions will be. Heavy and swift pressure is needed on Iran and the sanctions must be evaluated according to their results.”

Iran accused the EU of waging "psychological warfare". One politician responded by renewing a threat to blockade the Strait of Hormuz, an oil exporting route vital to the global economy, and another said Tehran should cut off oil to the EU immediately.

That might hurt Greece, Italy and other ailing economies which depend heavily on Iranian crude and, as a result, won as part of the EU agreement a grace period until July 1st before the embargo takes full effect.

The oil sector accounts for some 90 per cent of Iranian exports to the EU. Europe is Iran's second-largest oil customer after China.

The widely expected EU sanctions move, which came a day after a US aircraft carrier, accompanied by a flotilla that included French and British warships, made a symbolically loaded voyage into the Gulf in defiance of Iranian hostility, is likely to ramp up tensions in the region.

Some analysts say Iran, which denies accusations that it is seeking nuclear weapons, could be in a position to make them next year. With Israel warning it could use force to prevent that happening, the row over Tehran's plans is an increasingly pressing challenge for world leaders, not least US president Barack Obama as he campaigns for re-election in November.

Meeting in Brussels, EU foreign ministers agreed to an immediate ban on all new contracts to import, purchase or transport Iranian crude oil and petroleum products.

However, EU countries with existing contracts to buy oil and petroleum products can honour them up to July 1st. EU officials said they also agreed to freeze the assets of Iran's central bank and ban trade in gold and other precious metals with the bank and state bodies.

Along with US sanctions imposed on December 31st, the Western powers hope choking exports and hence funding can force Iran's leaders to agree to curbs on a nuclear programme the West says is intended to yield weapons.

Iran has said recently that it is willing to hold talks with Western powers, though there have been mixed signals on whether conditions imposed by either side make new negotiations likely.

The Islamic Republic insists it is enriching uranium only for electricity and other civilian uses. It has powerful defenders against the Western action in the form of Russia and China, which argue that the new sanctions are unnecessary, and can also probably count on China and other Asian countries to go on buying much of its oil, despite US and European efforts to dissuade them.

Russia expressed "regret and alarm" over the ban saying Tehran will not make concessions on its nuclear programme when faced with increasing Western pressure.

Reuters