EU reaches preliminary agreement on Iran oil ban

But debate is when it should come into force, EU diplomats said Wednesday.There is an agreement in principle to forge ahead with an oil embargo, a diplomat told AFP, but added there is still a lot of work to agree on the timing of its implementation for a meeting of foreign ministers on January 30.French Foreign Minister Alain Juppe, speaking in Lisbon, said of the meeting: Its at this occasion I hope that we can adopt this embargo on Iranian oil exports.We are working on this and things are on track, Juppe said, addressing a press conference with Portuguese counterpart Paolo Portas.The EU had been divided over whether to impose an Iranian oil ban, but a breakthrough was reached late December after Greece, Spain and other nations that import Irans crude lifted their objections, another diplomat said.Britain and France have pushed for an embargo to punish Iran over its nuclear programme, which Western powers say is aimed at building an atomic bomb. Tehran rejects the charges.EU governments are now negotiating when the embargo should affect existing contracts between Iran and European companies, the diplomats said.Thats the bone of contention, in terms of timing, one of the diplomats said.Another issue to resolve is finding alternative sources of oil for countries that rely on Iranian crude.Oil from Iran in 2010 amounted to 5.8 percent of total EU imports, making Tehran the blocs fifth-largest supplier after Russia, Norway, Libya and Saudi Arabia.Spain represents 14.6 percent of Iranian oil imports to Europe, Greece 14.0 and Italy 13.1 percent.Tensions between the West and Iran, which rejects the accusation, have sharpened in recent days, with Tehran renewing a warning to America against keeping a US navy presence in the oil-rich Gulf.US President Barack Obama on Saturday signed tough new sanctions targeting Irans central bank and financial sector in order to squeeze the countrys crucial oil revenues, most of which are processed by the bank.The United Nations has slapped four sets of sanctions on Iran and the United States and European Union have imposed their own unilateral measures to pressure the Islamic republics government.In response to the threat of new sanctions, Iran has warned it could close the Strait of Hormuz, through which 20 percent of the worlds oil is shipped.World oil prices spiked close to eight-month highs on Wednesday, with Brent North Sea crude for delivery in February jumping to $113.97 per barrel while New Yorks West Texas Intermediate spiked to $103.74. Prices fell in later deals. --AFP