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EU imposes new Iran sanctions, but no oil embargo

12.01.2011  | 

European Union foreign ministers agreed Thursday to impose new sanctions on additional Iranian entities, but a French proposal for a blanket embargo on Iranian oil exports met significant resistance. EU foreign policy chief Catherine Ashton said an oil embargo was still "being debated" and diplomats said some restrictions on Iran oil imports were likely to be imposed in the coming months.

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By LAURENCE NORMAN

European Union foreign ministers agreed Thursday to impose new sanctions on additional Iranian entities, but a French proposal for a blanket embargo on Iranian oil exports met significant resistance.

An EU statement released Thursday following the meeting expressed "serious and deepening concerns" at Iran's nuclear program and said the 27-nation bloc would consider further measures against Iran's banking, transport and energy sector. But the statement stripped out explicit mention of an oil embargo or import restrictions on Iranian oil that was in earlier drafts.

EU foreign policy chief Catherine Ashton said an oil embargo was still "being debated" and diplomats said some restrictions on Iran oil imports were likely to be imposed in the coming months.

"The detail of exactly what should be done now goes to the technical experts who decide what will work, what is appropriate for European Union member states to do....So those issues are being debated," Ashton said.

But the opposition the French proposal faced meant any move toward an oil embargo is likely to be slower and more cautious than Paris and a number of other European capitals had hoped.

"The pressure to work toward an oil embargo will not go away," said one Brussels-based European diplomat. "How far this will go is difficult to say. This could end up being a step-by-step process."

The opposition to endorsing the oil embargo push was led by Greece which is concerned about the economic impact on its country if import restrictions force up oil prices. Greece has become more reliant on Iranian imports in recent months as its economic crisis has worsened. Several other countries besides Greece also expressed concerns about the proposal, according to Brussels officials.

After the meeting, French Foreign Minister Alain Juppe, who led the effort to enact the embargo, said he would continue to advocate the measure. But he said the EU would also work to respond to the concerns expressed by Greece and some others.

"We'll work with our partners so that the interruption of Iranian imports can be compensated increased production from other countries," Juppe said.

Juppe and other French officials had seen the embargo as a critical component of the EU's efforts to counter the Iranian nuclear program, arguing the measure would force change in Iran because of the serious impact on a critical Iranian income stream.

The EU did add some new sanctions on Iran Thursday. It imposed an asset freeze and a travel ban on 180 additional Iranian citizens and companies linked to the Iranian nuclear industry. The EU also said it "deplores" a moved by Iran to expel the United Kingdom ambassador. At the same time, the EU said it sought a "diplomatic solution" to the impasse with Iran.

French officials have spoken of the need for "unprecedented" sanctions on Iran, and an oil embargo would mark a significant escalation of responses. The measure has caught the attention of the oil markets in recent days, lending upward pressure to prices. According to the International Energy Agency, Iran exported 870,000 barrels a day to Europe in the second quarter, mostly to Spain, Italy and Greece.

On Thursday, light, sweet crude oil for January delivery was down 23 cents at $100.13 a barrel on the New York Mercantile Exchange following a weak U.S. jobs report. Brent crude futures were also down.

Separately Thursday, the foreign ministers tightened measures against Syria over President Bashar al-Assad's crackdown on protesters.

The EU is adding 12 people and 11 companies to its current Syria sanctions list. Those targeted will have their assets frozen. The individuals themselves will be subject to a travel ban.

The EU also announced an export ban on key technology for oil and gas industries, a ban on trade in Syrian public bonds and a prohibition on Syrian banks opening new branches in the EU or entering joint ventures with European financial firms. However ministers again insisted that military intervention is off the table.

The EU repeated its call for "strong" United Nations action on Syria. So far, Russia has blocked action against Syria at the UN Security Council."


Dow Jones Newswires



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