The European Union (EU) today tightened its sanctions against Tehran and laid out plans for a possible embargo on Iranian oil in response to mounting concerns in the West over the Opec producer's nuclear work.
At a meeting in Brussels, EU foreign ministers decided new sanctions should be drawn up in time for their next meeting in January. That could lead to gradual cuts in Europe's imports of Iranian crude.
Separately, they added 180 Iranian people and entities to a sanctions blacklist that imposes asset freezes and travel bans on those involved in the nuclear programme which Tehran says is for peaceful purposes.
Concern over Iran's programme grew this month after the International Atomic Energy Agency issued a report that suggested Iran has worked on designing an atom bomb.
French Foreign Minister Alain Juppe said after meeting his counterparts in Brussels that the EU would work with its partners to offset any shortfall if an oil embargo were imposed.
"We are working on it," he told reporters when asked about the possibility of an oil ban. "We have to work with different partners so that the interruption of (oil) deliveries from Iran could be compensated by a rise in production in other countries."
France, which has pushed for oil sanctions, appears to have overcome resistance among some EU member states who
had expressed concerns over economic costs of an oil embargo.
Experts say global crude prices could rise if the EU bans Iranian oil, which could bring additional economic pain as Europe struggles with a debt crisis and the spectre of recession.
Britain, along with France, had pushed for decisive EU action after Tuesday's storming of British diplomatic compounds in Tehran by protesters angry over London's decision this month to impose sanctions on the Iranian banking sector.
"I hope we will agree today additional measures that will be an intensification of the economic pressure on Iran, peaceful legitimate economic pressure, particularly to increase the isolation of the Iranian financial sector," Foreign Secretary William Hague told reporters ahead of today's meeting.
Britain shut Iran's embassy in London and expelled all its staff on yesterday, saying the storming of the British mission in Tehran could not have taken place without consent from Iranian authorities.
Mr Hague denied a link between the embassy storming and today's meeting in Brussels.
"I stress that the measures I hope we will agree today are related to the Iranian nuclear programme. These are not measures in reaction to what has happened to our embassy," he told BBC radio.
Ministers said in addition to the oil sector, Iran's transport and finance industries could be targeted.
Reuters