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    January 23, 2012

EU Agrees to Iranian Oil Embargo

   VOA News

   The European Union has banned new purchases of Iranian oil and frozen
   the assets of Iran's central bank, as part of a Western campaign to
   pressure Tehran to suspend controversial parts of its nuclear program.
   EU foreign ministers agreed to the new sanctions at a meeting in
   Brussels on Monday. They agreed to allow EU nations with existing
   contracts for Iranian oil to honor those purchases until July 1. The
   grace period is meant to help major buyers of Iranian oil such as
   Greece to find alternative sources of supply before the full ban takes
   effect.
   The 27-nation bloc also agreed to stop all trade in gold and other
   precious metals with Iranian state institutions. The EU and the United
   States have been tightening unilateral sanctions on Iran in recent
   weeks in response to Iranian moves to accelerate uranium enrichment.
   Western powers accuse Iran of trying to develop nuclear weapons under
   cover of a civilian energy program, a charge Tehran denies.
   Iran's economy is heavily reliant on revenue from oil exports. The EU
   has been the second largest market for Iranian oil after China.
   EU and US sanctions have prompted a dramatic weakening in the value of
   Iran's currency, the rial. In black market trading on Monday, the rial
   dropped to a new record low of 20,500 to the dollar, a slump of more
   than 12 percent from last week.
   Iranian lawmakers reacted angrily to the new EU sanctions. Deputy head
   of parliament's national security committee Mohammad Ismail Kowsari
   repeated Iranian threats to close the Strait of Hormuz, a vital pathway
   for global oil supplies. He said any disruption to Iranian oil exports
   "definitely" will lead to the closure of the Strait.
   Another lawmaker serving on parliament's energy commission predicted
   the EU oil embargo will have "no impact" on the Iranian economy because
   Iran will find other customers for its oil exports. Ali Adyani said the
   only negative impact of the sanctions will be on Western countries that
   will have to cope with higher oil prices.
   Russian Foreign Minister Sergei Lavrov criticized the EU embargo.
   Speaking Monday, he said unilateral sanctions will not help to revive
   negotiations between Iran and six world powers on the Iranian nuclear
   program. Those talks have been on hold for a year, but Lavrov said he
   is hopeful they will resume soon.
   Russia and China supported several rounds of U.N. Security Council
   sanctions on Iran but oppose further measures, saying all parties
   should focus on negotiations. Moscow and Beijing both have close
   economic ties to Tehran.

   Some information for this report was provided by AP, AFP and Reuters.
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