BRUSSELS/TEHRAN, Jan 23, (Agencies): 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.

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 on Monday.
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 US 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” but said Iran was still developing atomic weapons.

Israel, assumed to have the only nuclear arsenal in the Middle East, 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 Dec 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 United Nations’ 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 by international treaty 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 Dec 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 and other Asian countries to go on buying much of its oil, despite US and European efforts to dissuade them.

“USS Abraham Lincoln ... completed a regular and routine transit of the Strait of Hormuz ... to conduct maritime security operations as scheduled,” Pentagon spokesman Navy Captain John Kirby told AFP via email Sunday.

“The transit was completed as previously scheduled and without incident.”
The carrier, which can have up to 80 planes and helicopters on board, was escorted by the guided-missile cruiser USS Cape St George and two destroyers.

Earlier, Britain’s Ministry of Defence said a British Royal Navy frigate and a French vessel had joined the carrier group to sail through the strategic waterway.

While allied ships often participate in US naval exercises and sometimes are part of joint naval flotillas, the presence of British and French ships seemed to be a message to Tehran about the West’s resolve to keep the route open.

“HMS Argyll and a French vessel joined a US carrier group transiting through the Strait of Hormuz, to underline the unwavering international commitment to maintaining rights of passage under international law,” said a spokesman from Britain’s MoD.

He said Britain maintained “a constant presence in the region as part of our enduring contribution to Gulf security.”

Embargo
Russia said Monday it viewed the European Union’s oil embargo on Iran as counterproductive and would continue to defend Tehran against further sanctions over its nuclear programme.
“Unilateral sanctions do not help matters,” Russian news agencies quoted Foreign Minister Sergei Lavrov as saying in response to the EU decision.
“We will restrain everyone from making harsh moves. We will seek the resumption of negotiations.”
Lavrov added he was confident that talks between Iran and the Western powers could be resumed soon.
“Moscow believes that there are fairly firm prospects for the resumption of talks in the immediate future,” he said.
“These opportunities exist despite an entire series of recent steps, including those taken by the IAEA director general.”
Russia has been fiercely critical of the United Nations’ nuclear watchdog for issuing a report in November claiming it had “credible” intelligence showing Tehran’s interest in acquiring nuclear weapons.
Lavrov has argued that the report contained nothing new and insisted that any sanctions beyond the four rounds approved already by the UN Security Council only threatened to harm the Iranian people.
“Since we have already adopted collective sanctions in the UN Security Council, everyone should be keeping to that line, adding nothing and taking nothing away from the common position,” Lavrov said.
Favourable
India wants to take as much Iranian oil as it can because terms are “favourable,” Oil Minister S. Jaipal Reddy said on Monday, after talks between the two sides last week on payment options for $12 billion of crude a year following fresh US sanctions.
“It will be our endeavour in future to tap the Iran source fully because the terms are fairly favourable,” Reddy told journalists at an energy conference, adding India was exploring all options to pay for the crude.
India, the world’s fourth-largest oil consumer, buys around 12 percent of its oil from the Islamic Republic. It pays through a Turkish bank after a previous clearing mechanism was shut down in December 2010.
But tougher US sanctions signed into law on Dec 31 in a further bid to pressure Iran to rein in its nuclear ambitions make the route through Halkbank vulnerable.
An Indian delegation went to Tehran last week to discuss options and the two sides have agreed India could use its restricted rupee currency for some of the payments, a government source said on Friday.
An industry source confirmed on Monday that India was considering rupee payments while ruling out the possibility of paying in yen.
A rupee account for Iran could be used to settle Tehran’s imports from third countries, the industry source said. “It will be an extension of the rupee arrangement wherever possible,” the source said on condition of anonymity.
“Iran was very accommodative,” Reddy said, adding that India respected United Nations sanctions but “we don’t go by sanctions imposed by regional blocks, by certain nations.”