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(photo credit: AP [file])
Britain pushed other nations at an EU summit Thursday to explore tougher sanctions against Iran, but European diplomats say a decision on targeting the country's oil and gas sectors was unlikely to be taken for months.
Their caution came despite assurances that British Prime Minister Gordon Brown gave visiting US President George W. Bush this week that the EU would soon start a "new phase of sanctions on oil and gas."
Diplomats at the two-day summit said the EU was considering energy sanctions if Iran rejects the latest international offer of economic incentives in return for an end to its uranium enrichment program.
However, the discussions were at a very early stage and would likely take several months before they arrive at a decision on the nature of further sanctions.
High in their mind are concerns that hitting the oil and gas sector could further push up record energy prices which have sparked a wave of protests from truckers, farmers and fishermen around Europe.
Iranian officials have indicated they will not stop enrichment, although they have yet to give a formal reply to an offer presented last week by EU foreign policy chief Javier Solana on behalf of Russia, China, the United States, France, Germany and Britain.
It holds out the prospect of assistance for peaceful nuclear energy and other economic cooperation in return for halting enrichment, which the West says could be used to make atomic weapons.
"Our countries are not interested in a vendetta against Iran, we're actually interested in a cooperative relationship," said British Foreign Secretary David Miliband as he arrived for the summit.
"If Iran is not interested in a cooperative relationship with the rest of the world by fulfilling its responsibilites on the non-proliferation treaty, then there are sanctions that follow," he told reporters.
The EU is expected to step up sanctions, perhaps as soon as next week, by freezing the assets of Iran's biggest bank. That did not happen Monday, as Brown had suggested, because at least several more days of technical work are needed to ensure a proposal to freeze assets of Iran's Bank Melli complies with U.N. and European rules, EU diplomats said.
Imposing sanctions on the energy sector would be more complicated, especially given the global energy crisis.
"The impact would be immediate and it would be huge," warned Frank A. Verrastro Director and Senior Fellow, Energy and National Security Program Center for Strategic and International Studies in Washington.
"The markets are bad enough. If you lost a major producer, a big exporter, there is no replacement," he added.
The EU is Iran's biggest trading partner, with two-way trade totaling $39 billion in 2006. Iran supplies nearly 4 percent of EU energy imports, according to the latest figures from the bloc's trade department, and some fear new sanctions could further push up oil and gas prices.