BRUSSELS, Jan 23: The EU slapped an embargo on Iran’s oil exports as part of a package of tough new sanctions on Monday aimed at blocking funds for Tehran’s suspect nuclear drive and pressing it to return to talks.

The oil ban, along with sanctions against Iran’s central bank and other measures, come amid mounting concerns of confrontation after the UN atomic agency reported Tehran was inching ever closer to building a nuclear bomb.

“Today’s sanctions show how serious EU member states are about preventing nuclear proliferation and pressing Iran to return to the negotiating table,” said British Foreign Secretary William Hague.

“Iran continues to defy UN resolutions and enriches uranium to 20 per cent for which there is no civilian explanation,” Mr Hague added as he joined foreign ministers from the 27-nation bloc to decide the sanctions.

“It is legitimate for us to increase the pressure on Iran to enter into negotiations.” After weeks of fraught talks on the terms of an embargo expected to hurt financially-distressed European Union nations, the ministers agreed on an immediate ban on oil imports and a gradual phase-out of existing contracts between now and July 1.

They also froze the assets of the country’s central bank “while ensuring that legitimate trade can continue under strict conditions”, a statement said.

In the toughest action yet to reduce Iran’s ability to fund a nuclear weapons programme, the EU outlawed petrochemical imports and investments and banned the sale of gold, diamonds and other precious metals.

Sensitive goods were also ruled out for trade, and added three people and eight firms to a list of individuals and entities targeted by an assets freeze and visa ban.

Meanwhile, global powers involved in negotiations on Iran’s nuclear programme are still waiting for Tehran to come forward and resume talks left in limbo since January last year, said EU foreign policy chief Catherine Ashton.

“The pressure of sanctions is designed to try and make sure that Iran takes seriously our request to come to the table,” she said.

“Iran has the opportunity to come forward not just to talk, but to have some concrete issues to talk about,” she added. “It is very important that it is not just about words: a meeting is not an excuse, a meeting is an opportunity.” The UN’s International Atomic Energy Agency confirmed on Monday that a high-level visit to Iran would take place from January 29-31 for talks on Tehran’s nuclear activities.

The EU is Iran’s second largest oil customer after China.

The potential impact on economically troubled EU nations heavily dependent on Iranian oil, Greece, Spain and Italy, as well as on the global oil market — where oil prices rose on news of the embargo — will be reassessed by May 1.

Greece’s dependence in particular held up an accord on the embargo as the debt-laden nation relies on Iran for more than a third of its imports and had struck preferential financial terms with Tehran.

Greece initially wanted a transition period of up to a year, and intensive talks have taken place for weeks to find alternative sources.

“Our sacrifice is really major,” said Spain’s Foreign Minister Jose Manuel Garcia Margallo, though he reported that alternatives had been found. “We want to show our support to peace and stability.” The EU has already frozen the assets of 433 firms and 113 individuals, as well as restricting trade and investment in the oil and gas industries.

The EU imported some 600,000 barrels of Iranian oil per day in the first 10 months of last year, making it a key market alongside India and China, which has refused to bow to pressure from the US to dry up Iran’s oil revenues.

Iranian oil accounted for 34.2 per cent of Greece’s total oil imports, 14.9 per cent of Spain’s and 12.4 per cent of Italy’s in the first nine months of last year, according to the latest EU statistics.The bloc therefore has been seeking new suppliers able to match the attractive conditions offered by Tehran. Contacts are under way with Saudi Arabia and hopes are high that Libya can soon increase its production.

Meanwhile, Iran on Monday rejected new sanctions imposed by the European Union on its oil as “psychological warfare”, saying they would worsen the stand-off over the Islamic state’s nuclear programme.

“European Union sanctions on Iranian oil is psychological warfare ... Imposing economic sanctions is illogical and unfair but will not stop our nation from obtaining its rights,” Foreign Ministry spokesman Ramin Mehmanparast was quoted as saying by state television in Tehran, referring to Iran’s nuclear energy ambitions.

Also on Monday, Deputy Foreign Minister Abbas Araqchi told the official news agency IRNA that the more sanctions were imposed on Tehran over its uranium enrichment work, “the more obstacles there will be to solve the issue”.

“The European countries and those who are under American pressure should think about their own interests. Any country that deprives itself of Iran’s energy market will soon see that it has been replaced by others,” Mr Mehmanparast added.—Agencies