Iran issued new threats to wipe Israel "off the face of the earth" Sunday as a new EU sanctions against its oil sector came into full force.

Announcing three days of missile tests in the coming week, Revolutionary Guards General Amir Ali Hajizadeh said the exercises should be seen as a message "that the Islamic Republic of Iran is resolute in standing up to ... bullying, and will respond to any possible evil decisively and strongly."

Any attack on Iran by Israel would be answered resolutely: "If they take any action, they will hand us an excuse to wipe them off the face of the earth," said Hajizadeh, head of the Guards' airborne division, according to state news agency IRNA.

The missile tests will target mock-ups of air bases in the region, Hajizadeh said, adding that its ability to strike US bases in the Gulf protects Iran from US support for Israel.

"US bases in the region are within range of our missiles and weapons, and therefore they certainly will not cooperate with the regime (Israel)," he told IRNA.

Playing down sanctions, the governor of the Islamic Republic's central bank said his country had built up $150 billion of foreign currency reserves to combat the effects of the embargo.

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Mahmoud Bahmani said that Iran had not sat idle in the face of Western sanctions, but had implemented programs to counter the impact of what he described as "spiteful policies", according to Iran's Mehr News Agency, which is owned by the Islamic Ideology Dissemination Organization.

Bahmani did not give details about what those Iran's plans may be but told Mehr that Iran's oil sales have been over $100 billion in addition to $40 - $50 billion of exports, giving a $150 billion foreign reserve chest.

Meanwhile, Mehr listed what it said were four main scenarios that Iran could employ to counter sanctions. These included using foreign currencies other than the Euro and US dollar, closing the Strait of Hormuz, increasing oil stores and reducing oil production from certain oilfields.

Also on Sunday, Iran's Petroleum Minister, Rostam Ghasemi, said Iran was "fully prepared to deal with sanctions."

In a lengthy statement published on the Petroleum Ministry website, Ghasemi said that "the government has planned and prepared for all possible options in order to counter sanctions".

He added that though sanctions prevented oil exports to US and EU markets, Iranian crude is still being sold on international markets.

Ghasemi commented that the world's oil market "ought not to be political" because "the most vulnerable citizens in oil-importing countries are suffering", and added that only "a few" countries had imposed sanctions on Iran, "due to [those countries'] irrational demands".

Noting that the US had allowed China and other countries to be exempt from oil sanctions, Ghasemi added: "America knows that if Iranian oil is removed completely from the market, prices increase."

The European government passed sanctions against Iran's crude oil sector in January, to punish the Islamic Republic for its nuclear program.

The EU sanctions prohibit EU members from importing Iranian crude oil and petrochemicals and from insuring vessels transporting them. All contracts for importing Iranian oil that were concluded before January 23 had to be terminated by Sunday.  Last year, the EU accounted for almost a quarter of Iran's oil exports.

The US, Israel and EU believe Iran is aiming to build nuclear weapons, while the Islamic Republic claims its nuclear program is peaceful.

In three rounds of negotiations, Western powers have demanded Tehran halt its high-grade uranium enrichment activities, ship all high-grade uranium out of the country and close down a key enrichment facility.

But the talks have lost steam. At a meeting among political leaders in Moscow last month, there was not enough common ground for negotiators to agree yet whether to meet again.

Last Thursday, the US enforced sanctions on countries carrying out oil transactions with Iran's Central Bank, although China and 19 other countries are exempted.

There are signs that sanctions are causing significant damage to Iran's energy sector.

Last October, the US Treasury told the US Senate Bank Committee that Iran faced a projected loss of $14 billion per year in oil revenues through 2016.

The Iranian rial has also plummeted while the country's official inflation rate skyrocketed over the past year to 21.5%.

In April, Iran's parliament speaker Ali Larijani admitted that Iranians were suffering from high youth unemployment.

On Sunday, with sanctions set to bite even harder, Iran's media voiced doubts on the effectiveness of the oil embargo.

Tabnak, the website of ex-Revolutionary Guards Commander and Expediency Discernment Council secretary Mohsen Rezae,  said the sanctions were based on the "rational actor model",  according to which Iran will abandon its nuclear program after the embargoes squeeze the Iranian middle class, leading to civil unrest.

However, Tabnak said Iran believes the West's dependence on oil and petrochemicals will result in a "feedback loop" that will ultimately force some Western countries to scale back the oil embargo.

Iran's ISNA news agency translated a lengthy article that appeared on the OilPrice.com oil and energy news site on Friday, and which argues that oil sanctions against Iran have not worked because Teheran has implemented tactics - including a barter deal with Pakistan to exchange wheat for oil - to "give itself breathing room."

Meanwhile, the Irdiplomacy website, which is headed by Seyyed Mohammad Sadegh Kharazi, Iran's former ambassador to the UN and France, and who is close to reformist former PM Mohammed Khatami, said oil sanctions cannot be effective because if Iran fails to sell its oil to Europe it will sell to other countries.

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