EU's toughest sanctions yet put Iran on final warning over nuclear programme

Embargoes on oil and banking will hit ailing EU countries dependent on trade with Tehran

The toughest sanctions yet imposed on Iran will be unveiled by the European Union on Monday amid warnings it could be the last chance to resolve the nuclear stand-off before military strikes are considered.

The punitive measures will include embargoes on oil, the country's central bank and financial institutions, with the aim of driving the Tehran regime to the negotiating table as it faces its revenue lifeblood being choked off.

Failure to persuade Iran to halt its nuclear weapons programme through the EU's sanctions, alongside similar moves by the US, would inevitably lead to pressure by Israel for air strikes. General Martin Dempsey, Chairman of the US Joint Chiefs of Staff, was in Tel Aviv yesterday to discuss the unfolding scenario and, according to diplomatic sources, dissuade Benjamin Netanyahu's government from taking pre-emptive action.

Details of the economic offensive show the extent to which Europe and the US intend to put Iran in a trade stranglehold while, at the same time, revealing the problems in enforcing the measures. The EU countries which buy 25 per cent of Iran's oil output are also the ones affected the worst by the eurozone crisis – Greece, Portugal and Spain. They will have to pay more for alternative supplies and also to modify refineries, but there are, at present, no plans by other member states to bail them out.

There is also apprehension that the embargo may end up by creating an oil shortage which will drastically push up prices, actually helping the beleaguered Iranian regime. China, a large-scale purchaser of Iranian fuel will, it is believed, continue with existing contracts, while other major buyers such as India, Japan and South Korea have indicated they will have to find alternative sources of supply before jettisoning Iranian oil.

The uncertainties have forced the EU to put a review system in place to monitor the effect of the sanctions. Iranian clients such as Greece will be given an extended time period, of between three and eight months, to find replacement for Iranian supplies.

The policy will be reassessed if it appears to be backfiring, with the price of oil rising steeply and the weakened economies going into tailspins.

Intense negotiations have been held with other members of OPEC (Organisation of the Petroleum Exporting Countries) to try to persuade them to raise production. Western diplomats insist there are strong signs that Saudi Arabia and producers in the Gulf, fierce Sunni rivals of Shia Iran, will help. The issue was discussed during a visit to Bahrain by Prince Turki al-Faisal, the highly influential former head of Saudi intelligence, earlier this week.

The UK's trade links with Iran are small, with only 0.7 % of oil, worth £147m out of a total import bill of £19.4bn, coming from the country. Exports of goods and services from Britain in 2010 amounted to £414m – a fall of around 41 per cent from the previous year. Import of goods from January to September last year were around £178m.

Information obtained by The Independent shows there are six Iranian companies operating in the UK – Bank Saderat, Bimeh Iran Insurance, Bank Sepah, Melli Bank, NPC and the National Iranian Oil Company. Some of these may be on the sanctions list being drawn up over the weekend. Five British companies – Shell, BP, Rio Tinto, BAT and Clontarf – continue to operate in Iran and will be affected by both the EU oil sanctions and the US regulations on counties trading with Tehran.

The Central Bank of Iran will be on the sanctions list and there will be a freeze on the movement of the country's gold reserves held abroad, putting further strain on trading activities and triggering what President Ahmadinejad complained was "the heaviest economic onslaught on a nation in history".

The value of the national currency, the rial, has fallen to an all-time low of 18,000 to a dollar, a drop of 6,000 in a month. With fresh tightening of the screw to come, the foreign minister, Ali Akber Salehi, warned Gulf states against putting themselves in a "dangerous position" if they sided with the West and raised production. The minister claimed, at the same time, that the US, in particular, was "playing a two-faced game". "They are flexing their muscles in public but also secretly saying 'come and talk with us'," he said.

Kim Sengupta: The West knows air strikes will only stir up hornet's nest

Ofcom switches off Iranian broadcaster

Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind-the-scenes to watch the latest series
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
News
Winchester College Football (universally known as Winkies) is designed to make athletic skill all but irrelevant
Life...arcane public school games explained
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
News
i100(and it's got nothing to do with the Great British Bake Off)
News
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
News
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
News
news It's not just the world that's a mess at the moment...
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Life and Style
tech
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

C# Algo-Developer (BDD/TDD, ASP.NET, JavaScript, RX)

£45000 - £69999 per annum + Benefits + Bonus: Harrington Starr: C# Algo-Develo...

Senior Data Scientist (Data Mining, Apache Mahout, Python,R,AI)

£60000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Senior Data Sc...

Data Scientist (SQL,Data mining, data modelling, PHD, AI)

£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

Java Developer - 1 year contract

£350 - £400 Per Day: Clearwater People Solutions Ltd: Our client based in Cent...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone