EU Iran Oil Sanctions Likely to Be Phased In Over Time, Official Says

A European Union embargo on Iranianoil will probably be phased in to protect countries with thegreatest reliance on imports from the country, according to anEU official familiar with the talks.

EU foreign ministers are likely to agree to block Iranianoil imports at a meeting in Brussels on Jan. 30, and workinggroups are negotiating the details of how the embargo will beimposed, said the official, who declined to be identifiedbecause the talks are private.

Countries with the biggest dependence on Iranian oil,including Italy, Greece and Spain, have raised concerns over howexisting contracts should be treated when the embargo isimposed, the official said. Phasing in the sanctions would helpto ensure that Iran, rather than the European countries, losesout as a result of the embargo, he said.

France, Germany and the U.K. are taking the lead in pushingfor the embargo to increase pressure on Iran over its nuclearprogram, the official said, adding that it has the support inprinciple of all 27 member states. Western countries allege thatIran��s nuclear-development plans are aimed at building atomicweapons. Iran says they are for civilian purposes and togenerate electricity.

Europe��s sanctions threat and an Iranian demand that U.S.warships stay out of the Persian Gulf have stirred new tensionsbetween Iran and the West, contributing to higher energy prices.Crude oil traded in New York for February delivery was at$102.23, up 42 cents, at 12:46 p.m. London time, heading for aweekly gain.

Debts to Eni

Italian Prime Minister Mario Monti has said that an embargoshould exempt crude sold by Iran to pay off debts to Rome-basedEni SpA (ENI), Italy��s largest oil company.

��An oil embargo is conceivable as long as it remainsgradual and excludes the deliveries that serve to reimburse thebillion of euros in debts that Iran owes to Eni, our nationalcompany,�� Monti told France��s Le Figaro newspaper in aninterview published yesterday.

Italy gets 13 percent of its imp! orted cr ude from Iran,Monti said, making it more sensitive to a supply shock thanother European countries. France taps Iran for only 3 percent ofits oil imports, he said.

Greece, which relied on Iran for 14 percent of its oilimports in the first half of 2011, according to the U.S. EnergyDepartment��s Energy Information Administration, has decided toabide by any curbs after blocking them last month, an officialat the Greek Environment, Energy and Climate Ministry said onJan. 3 on condition of anonymity.

The U.S. tightened its Iran sanctions on Dec. 31 and ispushing the EU to follow suit.

The Iranian Revolutionary Guard Corps will hold large-scaleexercises in the Strait of Hormuz and the Persian Gulf nextmonth, the state-run Fars news agency reported today.