The European Union banned imports of oil from Iran on Monday and imposed a number of other economic sanctions, joining the United States in a new round of measures aimed at deflecting Tehran's nuclear development programme.
In Iran, one politician responded by renewing a threat to blockade the Strait of Hormuz, an oil export route vital to the global economy, and another said Tehran should cut off crude shipments to the EU immediately.
That might hurt Greece, Italy and other ailing economies which depend heavily on Iranian oil and, as a result, won as part of the EU agreement a grace period until July 1 before the embargo takes full effect. Angry words on either side helped nudge benchmark Brent oil futures above $110 a barrel on Monday.
A day after a US aircraft carrier, accompanied by a flotilla that included French and British warships, made a symbolically loaded voyage into the Gulf in defiance of Iranian hostility, the widely expected EU sanctions move is likely to set off yet more bellicose rhetoric in an already tense region.
Some analysts say Iran, which denies accusations that it is seeking nuclear weapons, could be in a position to make them next year. So, with Israel warning it could use force to prevent that happening, the row over Tehran's plans is an increasingly pressing challenge for world leaders, not least US President Barack Obama as he campaigns for re-election in November.
Israeli Prime Minister Benjamin Netanyahu, who has voiced scepticism about the chances of Iran being persuaded by non-military tactics, called the EU sanctions a “step in the right direction” but said Iran was still developing atomic weapons.
Israel, assumed to have the only nuclear arsenal in the Middle East, views the Iranian nuclear programme as a threat to its survival.
Meeting in Brussels, foreign ministers from the 27-state EU, which as a bloc is Iran's second biggest customer for crude after China, agreed to an immediate ban on all new contracts to import, purchase or transport Iranian crude oil and petroleum products. However, EU countries with existing contracts to buy oil and petroleum products can honour them up to July 1.
EU officials said they also agreed to freeze the assets of Iran’s central bank and ban trade in gold and other precious metals with the bank and state bodies.
EU seeks talks
The United Nations' nuclear watchdog, the International Atomic Energy Agency (IAEA), confirmed plans for a visit next week by senior inspectors to try and clear up suspicions raised about the purpose of Iran's nuclear activities.
Tehran is banned by international treaty from developing nuclear weaponry.
“The Agency team is going to Iran in a constructive spirit, and we trust that Iran will work with us in that same spirit," IAEA chief Yukiya Amano said. “The overall objective of the IAEA is to resolve all outstanding substantive issues."