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EU bans buying oil from Iran: How will Iran respond?

Iran threatened a blockade of the Strait of Hormuz in response to a new European Union ban on oil from Iran. Iran says it's considering an immediate shut off of oil to Europe.

By Justyna Pawlak and Hossein JasebReuters / January 23, 2012

The Nimitz-class aircraft carriers USS Abraham Lincoln and USS John C. Stennis in the Arabian Sea last Thursday. The USS Abraham Lincoln sailed through the Strait of Hormuz on Sunday.

REUTERS/U.S. Navy/Chief Mass Communication Specialist Eric S. Powell

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Brussels and Tehran

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

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In Iran, 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 1 before the embargo takes full effect.

Recommended: A briefing on Iran sanctions

A day after a U.S. 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, the widely expected EU sanctions move was likely to set off further bellicose rhetoric in an already tense region.

Some analysts say Iran, which denies accusations that it seeking nuclear weapons, could be in a position to make them next year. So, 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 U.S. President Barack Obama as he campaigns for re-election in November.

Meeting in Brussels, foreign ministers from the 27-state EU, which as a bloc is Iran's second-biggest customer for crude after China, 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 1.

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 U.S. sanctions imposed on Dec. 31, 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.

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EU foreign policy chief Catherine Ashton said: "I want the pressure of these sanctions to result in negotiations.

"I want to see Iran come back to the table and either pick up all the ideas that we left on the table ... last year ... or to come forward with its own ideas."

Iran has said lately 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.

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