European Union governments agreed Monday to an immediate ban on all new contracts to import, buy, or transport Iranian oil, but will give countries with existing contracts with Iran until July 1 to end those deals.

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The move is meant to put pressure on Tehran to give up its nuclear program, which Iran says is for peaceful purposes but many suspect may be intended to develop nuclear weapons.

EU governments also agreed to freeze the assets of Iran’s central bank and to ban all trade in gold and other precious metals with the bank and other public bodies.

While Iran has refused to shut down its nuclear program, saying it is necessary to meet the country’s rising energy needs, the United Nations’ International Atomic Energy Agency said last year it had evidence suggesting that Iran had worked on designing a nuclear weapon.

U.S. President Barack Obama signed into law similar legislation on New Year’s Eve, but economic considerations have weighed heavily on EU preparations for the embargo because of the heavy dependence of some EU states on Iranian crude.

EU officials will review the embargo before May to assess whether it has been effective and whether EU states are successfully finding sufficient alternative resources.

Though Saudi Arabia, Kuwait, and other oil-rich states in the Gulf are expected to increase oil output to offset the loss of Iranian exports, the concerted effort by Western powers to take Iran’s oil off international markets has kept global prices high.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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