EU agrees unprecedented oil embargo on Iran

The European Union agreed today to slap an embargo on Iran's oil exports as the West ramped up pressure on Tehran's suspect nuclear drive and urged it to return to the negotiating table.

"This is an important decision. It will be a major strengthening of the sanctions applied on Iran," said British Foreign Secretary William Hague.

"It is absolutely right to do this in view of Iran's continued breach of UN Security Council resolutions and refusal to come to meaningful negotiations on the nuclear programme," he added.

After weeks of tough talks on the timing and terms of a ban on Iranian crude, ambassadors of the 27 EU nations reached a political agreement in early morning meetings held as foreign ministers converged on Brussels for a day of talks.

The ministers, who also agreed to toughen sanctions against Syria, are to formally announce the measures against Tehran later today.

The compromise agreement provides for an immediate ban on importing Iranian crude and a gradual phase-out of existing contracts between now and July 1, diplomats told AFP.

The potential impact on financially stressed nations heavily dependent on Iranian oil,
Greece, Spain and Italy, as well as on the global oil market, where oil prices rose on news of the embargo, will be reassessed before the July 1 deadline, sources said.

Greece's dependence in particular held up an accord on the embargo as the debt-laden nation relies on Iran for more than a third of its imports and had struck preferential financial terms with Tehran.

Greece initially wanted a transition period of up to a year, and intensive talks have taken place for weeks to find alternative sources.

Iran sells around 20 per cent of its crude to EU nations, with Greece, Spain and Italy the top buyers.

"Our sacrifice is really major," said Spain's Foreign Minister Jose Manuel Garcia Margallo, though he reported that alternatives had been found. "We want to show our support to peace and stability," he added.

In the toughest measures yet to reduce Iran's ability to fund a nuclear weapons programme, the EU ministers are set to also target the country's central bank, petrochemicals and gold.

The measures come amid heightened concerns of confrontation following reports by the UN atomic agency, the IAEA, that Tehran is inching ever closer to building a nuclear bomb.