EU Governments Moving Closer to Iran Oil Embargo as Greece Lifts Objection

By James G. Neuger - Jan 5, 2012 2:46 AM GMT+0700

European Union governments moved closer to halting oil purchases from Iran, stepping up the confrontation over the Islamic republic’s nuclear program.

EU foreign ministers are aiming to announce harsher sanctions on Iran’s energy and banking industries at their next meeting on Jan. 30 after Greece lifted its objections to an oil embargo.

“We want to tighten sanctions on Iran -- the things that have been mentioned are the oil sector and the financial sector,” EU spokesman Michael Mann said by telephone in Brussels today.

French Foreign Minister Alain Juppe said in Lisbon today that he hopes a decision about an embargo on Iranian oil exports may be adopted at the Jan. 30 meeting of foreign ministers.

Oil fluctuated near an eight-month high after the European Union said it’s working to sanction oil imports from Iran and its banks and on concern that Europe’s debt crisis will affect consumption market. Crude for February delivery rose 29 cents to settle at $103.25 a barrel on the New York Mercantile Exchange.

The U.S. today welcomed the push toward an embargo.

“This is consistent with tightening the noose around Iran economically,” State Department spokeswoman Victoria Nuland said at a briefing in Washington. “The place to get Iran’s attention is in the oil sector.”

Iranian ‘Bluster’

Nuland also dismissed as “bluster” a threat by Iran to require permission for foreign warships to enter the Strait of Hormuz, a shipping channel from the Persian Gulf for about a fifth of the global crude oil supply.

“This is the kind of bluster that indicates they’re feeling pressure,” she said. The U.S. will “continue to play a global role” in ensuring freedom of navigation in international waters such as the Strait of Hormuz, she said.

A French-British push for an oil embargo was deflected last month by Greece, which relied on Iran for 14 percent of its oil imports in the first half of 2011, according to U.S. data.

Greece has since decided to abide by any EU-imposed embargo, an official at the Greek environment, energy and climate ministry said yesterday on condition of anonymity.

Iran, the world’s third-largest oil exporter, denies Western contentions that it is seeking to build atomic weapons and says it’s pursuing nuclear technology to generate electricity.

To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net