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EU approves embargo on Iranian oil, despite economic concerns

Some EU countries who agreed to the Iranian oil embargo get as much as 30 percent of their oil from Iran. But as Spain's foreign minister said today, they are 'willing to make the sacrifice.'

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EU foreign policy chief Catherine Ashton holds a news conference at the end of a European Union foreign ministers meeting in Brussels, Monday. The European Union agreed to an Iranian oil embargo 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 program.

Yves Herman/Reuters

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The European Union today approved an unprecedented embargo on Iran’s oil industry, outlawing any new contracts effective immediately and giving countries five months to find new suppliers to replace their existing deals.

The EU measures also limited relations with Iran’s central bank, but they fell short of Washington's tougher sanctions and threats to cut ties with any third party that does business with Tehran.

EU foreign policy chief Catherine Ashton said that the “phased embargo,” which comes on top of several rounds of sanctions, “are not an end in themselves. The purpose is to put pressure on Iran to come back to the negotiating table and either pick up all the ideas that we left on the table or to come forward with its own ideas.”

But the measures, agreed to by the 27 member states' foreign ministers, included a clause allowing for the policy to be reviewed in a few months, possibly undermining pressure on Tehran.

The embargo, meant to punish Iran for its defiance of international demands to suspend uranium enrichment, is so far having a muted impact on oil prices. The market appears confident that the embargo will not affect global oil supplies as a whole because other buyers of Iranian oil are resisting joining Western nations.

The EU decision was not without controversy. Greece held out until the last minute, giving in only after the addition of a clause stipulating that the EU would review the policy's effects on member states by May 1, opening the door to exceptions – not unlike the waiver provisions included in US sanctions approved earlier this month.

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