Europe to Unveil Iranian Oil Sanctions Monday

Pressure is mounting for Iran to end its controversial nuclear program as the European Union announced Friday it will implement tough new sanctions on the Middle Eastern nation. According to a source close to the EU, officials will ban the import of Iranian oil, by far the nation’s biggest export, while also restricting Iran’s trade in precious metals and freezing certain financial assets. According to the US Energy Information Administration, 18 percent of the 2.2 billion barrels of oil Iran exports each day is shipped to Europe.

The eurozone’s sanctions on Iran have reportedly not been finalized, but it is expected that officials will allow a grace period of between three and eight months. This grace period will allow European refiners to negotiate new sources from which to obtain the crude before Iranian oil is cut off. The move will follow similar sanctions already launched against Iran by the US and the UK. The sanctions part of a broader effort to convince Iran to abandon its nuclear program, which the government claims is for peaceful purposes but officials around the world believe is aimed at developing weapons.

Right around 50 percent of the Iranian government’s revenue comes from its oil. Analysts say the nation will still be able to sell some of its oil, to countries like China, India and other Asian nations, but those buyers will likely demand discounts of 10 to 15 percent because of Iran’s narrowing pool of buyers. Currently, about 35 percent of Iran’s oil goes to China and India. Western powers have been careful in their approach to the Iran nuclear issue, wanting to pressure Tehran’s finances without creating an oil shortage, that could send oil and gas prices soaring.

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