Iran blasts EU over looming oil embargo

Iran has sharply criticised moves by the European Union to ban oil from the Islamic republic saying it was ‘an economic war’ through sanctions. European diplomats on Wednesday said a preliminary agreement on an EU embargo on Iranian oil had been reached with an announcement expected at a foreign minister’s meeting at the end of January. 

Reuters/Caren Firouz

Tehran has played down the impact of the looming sanctions claiming demand was so high for Iranian oil that they would easily be able to sell it elsewhere. But there are signs of anger over the move.

Military and political leaders have threatened to close the strategic Strait of Hormuz in the Gulf, through which 20 per cent of the world’s oil flows, to all Middle East oil tankers if its oil is blocked.

It has also warned it will unleash the full force of its navy if the US tries to redeploy an aircraft carrier to its fifth fleet base in Bahrain in the Gulf.

The threat of sanctions comes from fears Iran is trying to develop a nuclear bomb under the cover of a nuclear programme it says is exclusively for peaceful, civilian use.

Iran exports 18 per cent of its oil to the EU, making the bloc the second-biggest destination after China.

Oil revenues account for 80 per cent of Iran’s foreign currency earnings.

China has already said it opposed unilateral sanctions against Iran, but US Treasury Secretary Timothy Geithner is to travel to China and Japan next week to discuss sanctions coordination.

Last weekend, the US enacted a new law hitting Iran's central bank which processes most of the country's oil sales.