Report: EU countries agree to embargo on Iranian oil imports

The European Union has agreed in
principle to blocking imports of oil from Iran, a decision that could deal a devastating blow to the Iranian economy. 

The EU embargo, as reported by Reuters, comes on the heels of the United States approving sanctions against the Central Bank of Iran. The EU embargo creates a one-two punch against Iran for
its nuclear program.

EU diplomats said member countries dropped their objections to the Iran embargo at a meeting in late December.

“A lot of progress has been made,” an EU diplomat told Reuters. “The principle of an oil embargo is agreed. It is not being debated any more.”

{mosads}EU countries collectively are the second biggest Iranian oil market after China, buying about 450,000 barrels per day, according to the wire service.

Iran threatened last month to close
down the Strait of Hormuz, an oil passage in the Persian Gulf through which nearly
one-fifth of the world’s oil travels, if the West imposes economic
sanctions.

The U.S. Fifth Fleet, based in Bahrain,
has said it would prevent Iran from closing the strait.

Tensions between the two countries
continued to rise on Tuesday, after Iran warned U.S. carriers to stay out of
the Persian Gulf. The Pentagon rebuffed Iran and said the U.S. would not stop its
operations there.

The U.S. sanctions, which were included
in the Defense Authorization Act that President Obama signed into law last week, would
penalize financial institutions conducting business with Iran’s Central Bank.
Obama took some issue with the provision in a signing statement, indicating
there could be some flexibility in how the law is enforced.

But the sanctions could continue to
take a bite out of Iran’s economy, where the Iranian rial has dropped against
the dollar.

Analysts warn that conflict between the
U.S. and Iran could cause oil prices to spike. They say that while the Iranians
are not able to shut down the strait because the United States would stop them, they
still have the ability to disrupt the world market.