By CLARE HUTCHISON
The 27-nation European Union agreed on Monday to
block all crude-oil imports from Iran, as it steps up pressure
on the Gulf nation to scale back its nuclear-enrichment
Following a meeting of EU foreign ministers in Brussels, the
European Council said it has banned
imports of Iranian crude oil and petroleum products, though
existing oil contracts can be honored until July 1.
The embargo also applies to imports of petrochemical products from Iran and
forbids supplying the country with technology or funds for use in this
The Council also agreed to freeze assets of the Iranian
central bank within the EU.
"Given the EU's serious and deepening concerns over the
Iranian nuclear program, the Council today broadened the EU's
restrictive measures against that country," it said in a
statement. "Today's decisions target the sources of finance for
the nuclear program, complementing already existing
The boycott will squeeze Iran's wider economy, as oil
exports account for half the government's revenue. The EU is
the second-largest customer of Iranian oil after China, buying
around one-fifth of Iran's oil exports.
EU and US officials have also been appealing to Asian
countries to join the boycott.
Earlier on Monday, the EU's foreign policy chief, Catherine Ashton, said
"the pressure of sanctions is designed to try and make sure
that Iran takes seriously our request to come to the table and
Arriving at the meeting of the Council, British Foreign
Secretary William Hague said Iran "continues to defy United
Nations sanctions" with its nuclear program and that it is very
important to "increase peaceful and legitimate pressure on the
Iranian government to enter into meaningful negotiations with
the international community."
Iranian authorities have denied the Gulf nation is making
nuclear weapons, saying the purpose of program is to provide
energy for its citizens.
However, a report by the International Atomic Energy Agency
published in November said Iran had carried out "activities
relevant to the development of a nuclear explosive device."
Before the ban was official, Tehran issued retaliatory
threats to shut off the Strait of Hormuz, a sea passage on
Iran's southeast coast through which 20% of the world's oil
The confrontation has pushed global oil prices higher in
recent weeks. Crude-oil futures for February delivery were up
0.8% to $99.09 a barrel on Monday.
Ahead of the embargo announcement, Commerzbank analysts said
the gradual nature of the ban should limit extreme fluctuations
in oil prices.
The import ban "will be implemented gradually over a period
of several months, which should dampen its inflationary effect
on the oil price," the analysts said in a note.
Commerzbank said the ban is worrying, however, as it comes
amid uncertainty about the oil supply from South Sudan. The
country has threatened to cut supply because its neighbor to
the north, Sudan, has been siphoning off large amounts of its
oil through the pipeline network that goes through each
"Any prolonged discontinuation of South Sudan's oil
production, in combination with the partial shortfall in
Iranian oil exports, could lead to a tightening of supply on
the oil market and cause prices to rise still further,"
Dow Jones Newswires