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EU bans Iran oil with grace leeway

Brussels/Tehran, Jan. 23 (Reuters): The EU banned imports of oil from Iran today and imposed a number of other economic sanctions, joining the US in a new round of measures aimed at deflecting Tehran’s nuclear development programme.

In Iran, one politician responded by renewing a threat to blockade the Strait of Hormuz, an oil export route vital to the global economy, and another said Tehran should cut off crude shipments to the EU immediately.

That might hurt Greece, Italy and other ailing economies which depend heavily on Iranian oil and, as a result, won as part of the EU agreement a grace period until July 1 before the embargo takes full effect. Angry words on either side helped nudge benchmark Brent oil futures above $110 a barrel today.

A day after a US 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 is likely to set off yet more bellicose rhetoric in an already tense region.

Some analysts say Iran, which denies accusations that it is 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 President Barack Obama as he campaigns for re-election in November.

Israeli Prime Minister Benjamin Netanyahu, who has voiced scepticism about the chances of Iran being persuaded by non-military tactics, called the EU sanctions a “step in the right direction”.

Israel, assumed to have the only nuclear arsenal in West Asia, views the Iranian nuclear programme as a threat to its survival.

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 US sanctions imposed by Obama on December 31, the western powers hope that choking exports and hence revenue can force Iran’s leaders to agree to curbs on a nuclear programme the West says is intended to yield weapons.

The UN’s nuclear watchdog, the International Atomic Energy Agency, confirmed plans for a visit next week by senior inspectors to try and clear up suspicions raised about the purpose of Iran’s nuclear activities. Tehran is banned from developing nuclear weaponry.

“The agency team is going to Iran in a constructive spirit, and we trust that Iran will work with us in that same spirit,” IAEA chief Yukiya Amano said in a statement announcing the December 29-31 visit. “The overall objective of the IAEA is to resolve all outstanding substantive issues.”

EU foreign policy chief Catherine Ashton said of the new sanctions: “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.

It has powerful defenders against the western action in the form of Russia and China, which argue that the new sanctions are unnecessary, and can also probably count on China to go on buying much of its oil, despite US and European efforts to dissuade them.

Russia foreign minister Sergei Lavrov, classifying the EU embargo among “aggravating factors”, said Moscow believed there was a good chance that talks between the six global powers and Iran could resume soon.

 
 
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