The European Union has agreed to sanction Iranian oil exports as part of a strategy to cut off funding for the country's nuclear program.
EU foreign ministers adopted an oil embargo at a meeting this morning, the Associated Press reported. British Foreign Secretary William Hague described it as part of "an unprecedented set of sanctions."
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Under the embargo, EU members are banned from signing new oil contracts with Iran with immediate effect, the EU said. Existing contracts will be honored until July 1.
Investment in petrochemical companies and the export of relevant technology to Iran are likewise forbidden. Ministers agreed to freeze the assets of Iran's central bank, though legitimate trade will be allowed to continue "under strict conditions." They also placed restrictions on trade in precious stones and metals, and asset freezes for 11 more organizations and individuals.
EU foreign policy chief Catherine Ashton, speaking ahead of today's meeting, said sanctions were designed to "try and make sure that Iran takes seriously our request to come to the table."
Russia, a vocal opponent of oil sanctions, said the embargo was the wrong approach. Unilateral sanctions "do not help," Ria Novosti news agency quoted Foreign Minister Sergei Lavrov as saying.
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According to the BBC, EU countries currently buy around 20 percent of Iran's oil. The EU will carry out a review of the sanctions' effect on its members – notably Greece, which is heavily reliant on cheap Iranian oil – by May 1 and may even make up the costs Greece incurs, one diplomat told the AP.
Tehran insists that the loss of the European market will not cripple its oil industry, however. Earlier this month, S.M. Qamsari, International Director of the National Iranian Oil Co (NIOC) told Reuters that Iran "could very easily replace those customers," citing demand from China and other countries in Asia and Africa.
Iran denies Western accusations that it is seeking to develop nuclear weapons. It has threatened to close key shipping route the Strait of Hormuz if its oil is embargoed.
A US aircraft carrier, accompanied by British and French naval vessels, sailed through the Strait earlier, despite threats by Iran of unspecified action if US carriers entered the strategic waterway.
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