EU oil embargo on Iran comes into effect

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EU oil embargo on Iran comes into effect

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Iran dismissed a European Union oil embargo which took effect on Sunday.

01 July,2012 03:52 pm

Iran hassaid it was fullyprepared to counter the impact of sanctions with a $150 billionwar chest of foreign reserves.The EU ban on crude imports is part of a push by Westerncountries aimed at choking Irans export earnings to try toforce it to curb a nuclear programme they fear includes weaponsdevelopment. Tehran says it has no such plan.All possible options have been planned in government tocounter sanctions and we are fully prepared to deal with them,Oil Minister Rostam Qasemi said in comments on the ministryswebsite.Qasemi said Iranian oil was still being sold oninternational markets and that oil importers would be the biglosers if a blockade leads to price rises.The United States also has sanctions in place, although ithas spared all 20 of Irans major oil buyers from measuresagainst them for dealing in Iranian crude for now.The European Union banned new contracts for imports ofIranian crude in January, but allowed existing ones to continueuntil July 1. The embargo also covers transporting Iranian crudeor insuring shippers who are carrying it.There are signs the embargo is already having an impact onIrans economy.Its crude oil exports - which according to EU estimatesrepresent some 80 percent of the governments export revenues and half of its income - have fallen by 40 percent this year.Iran used to export a fifth of its crude to EU countries.The Iranian rial has fallen sharply and inflation is runningat 20 percent. Tens of thousands of Iranians have lost theirjobs and trade between Iran and Europe has halved in a year,according to Eurostat data from March.The governor of Irans central bank said it had built up$150 billion in foreign reserves to protect itself.We are implementing programmes to counter sanctions and wewill confront these malicious policies, Mehr news agency quotedMahmoud Bahmani as saying.In three rounds of negotiations, Western powers havedemanded Tehran halt its high-grade uranium enrichmentactivities, ship all high-grade uranium out of the country andclose down a key enrichment facility.Iran says its nuclear programme has only peaceful aims, butWestern countries and Israel fear Iran is developing nuclearweapons. Unprecedented oil sanctions on Iran have come into force,British Foreign Secretary William Hague said in a statement onSunday.These are the toughest measures the EU has adopted againstIran to date. They signal our clear determination to intensifythe peaceful diplomatic pressure on the Iranian government.