Bloomberg News

EU Reaches Preliminary Deal to Tighten Iran Sanctions

October 12, 2012

The European Union reached a preliminary agreement to tighten sanctions on Iran to increase pressure on the Gulf nation’s nuclear program, according to two EU diplomats with knowledge of the matter.

Officials from the EU’s 27 nations agreed in Brussels today to add several entities to the sanctions list to hinder the Iranian government’s ability to raise funds for its atomic program, which the U.S. and its allies say may be aimed at producing weapons, according to the officials, who declined to be identified because the talks were private.

The EU, which banned Iranian oil imports starting in July, also agreed to impose further restrictions on Iranian trade and the finance, energy and transportation industries, the diplomats said. The proposed sanctions must now be approved by the bloc’s foreign ministers, who meet Oct. 15 in Luxembourg.

The new measures are intended to close loopholes in existing sanctions, the diplomats said. The decision came after international talks yielded little progress in recent months. Iran denies that it’s developing nuclear weapons and maintains that its program serves civilian needs.

Iran increased the amount of 20 percent-enriched uranium produced at its Fordo facility to 189.4 kilograms (417.6 pounds) from 145 kilograms in May, the International Atomic Energy Agency said on Aug. 30. Its stockpile of low-enriched uranium at Natanz, purified to less than 5 percent, grew to 6,876 kilograms from 6,232 kilograms. Highly-enriched uranium can be used to produce electricity or manufacture an atomic bomb.

Oil Exports

Iran’s budget deficit may widen the most since at least 2007 as the U.S. and Europe are starving Iran of foreign currency by banning sales of oil, its main export, and blocking other transactions in dollars and euros, according to International Monetary Fund forecasts published today.

Previously the second-biggest crude producer in OPEC after Saudi Arabia, Iran exported 860,000 barrels a day last month, the International Energy Agency said in a report today. Production in the country slumped to 2.63 million a day from 2.85 million in August, according the report.

Remain Low

“Our assumption is that exports will remain quite low for the next few years,” Antoine Halff, the head of the IEA’s oil industry and markets division, said today on a conference call.

Israel has threatened to attack to stop the Gulf nation’s nuclear program if the sanctions don’t succeed in curbing it. Iranian leaders say they won’t bow down, even as the country’s crude output plunges to the lowest in more than two decades.

The pressure is going to increase if the Iranians “are not coming back with substantive willingness to engage in the negotiations,” Italian Foreign Minister Giulio Terzi said yesterday.

“They should provide guarantees that the enrichment is stopped or at least contained at a level which is compatible with the civilian uses,” he said.

To contact the reporter on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net


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