LONDON – Europe slapped a boycott on Iranian oil Monday, signaling that the Islamic republic’s second-largest market is likely to dry up as part of a U.S.-led campaign of sanctions that has already inflicted serious damage on Iran’s economy and sharply increased tensions.
The value of Iran’s currency is falling dramatically, prices are rising and Iranians are stocking up on supplies in fear of worse to come. Iran, which earns an estimated 70 percent of its revenue from oil sales, has threatened to retaliate by choking off the flow of oil through the Strait of Hormuz at the southern end of the Persian Gulf.
The U.S. says it will not permit the strait to be closed, and over the weekend sent the aircraft carrier Abraham Lincoln through the strait and into the gulf. There were no incidents.
European officials hope the new measures, in conjunction with tougher sanctions being imposed by Washington, will force Tehran back to the bargaining table over its nuclear enrichment program. Iran says the program is for peaceful purposes; the U.S. and its European allies suspect it of trying to build nuclear weapons.
Iran reacted defiantly. “The embargo will not affect Iran, and considering the economic turmoil in Europe, it will de facto hurt the EU members more than Iran,” Alaeddin Boroujerdi, head of parliament’s foreign policy committee, told the ISNA news agency.
Foreign Ministry spokesman Ramin Mehmanparast said Iran would not stop its nuclear program. “Imposing economic sanctions is illogical and unfair, but will not stop our nation from obtaining its rights,” he said.
In addition, the EU froze assets held in Europe by Iran’s central bank. It also proscribed trade in gold, precious metals and diamonds between the EU and Iranian public bodies.
British Foreign Secretary William Hague called the package “an unprecedented set of sanctions” that ought to encourage similar action by other nations.
European officials emphasized their desire to see Tehran re-enter talks over its nuclear program. “The pressure of sanctions is designed to try and make sure that Iran takes seriously our request to come to the table and meet,” said Catherine Ashton, the EU’s top diplomat.
The effect of the embargo has been amplified by a new round of U.S. sanctions, which, if fully implemented, would prevent companies that do business with Iran’s central bank from doing business with U.S. companies.
The embargo is part of a Western effort to convince countries that consume Iranian oil to find other sources, sharply reducing Iran’s oil income.