BRUSSELS (AP) - The European Union and Iran raised the stakes Monday in their test of wills over the Islamic republic's nuclear program, with the bloc banning the purchase of Iranian oil and Iran threatening to retaliate by closing the Strait of Hormuz, through which a fifth of the world's crude is transported.
The escalating confrontation is fraught with risks - of rising energy prices, global financial instability, and potential military activity to keep the strait open.
The EU's 27 foreign ministers, meeting Monday in Brussels, imposed an oil embargo against Iran and froze the assets of its central bank, ramping up sanctions designed to pressure Iranian officials into resuming talks on the country's nuclear program.
EU officials say the tighter sanctions are part of a carrot-and-stick approach, an effort to increase pressure while at the same time emphasizing their willingness to talk.
U.S. Secretary of Stae Hillary Rodham Clinton and Treasury Secretary Timothy Geithner welcomed the EU decision, calling it "another strong step in the international effort to dramatically increase the pressure on Iran." In their joint statement, they said the EU sanctions, combined with earlier ones imposed by the U.S. and the international community, "will sharpen the choice for Iran's leaders and increase their cost of defiance of basic international obligations."
But the initial response out of Tehran, the Iranian capital, was harsh.
Ramin Mehmanparast, a spokesman for Iran's Foreign Ministry, called the economic sanctions "illogical and unfair" saying: "It is only understandable in the framework of propaganda and psychological war."
Mehmanparast was quoted by website of state broadcasting company as saying, "Pressure and sanctions against a nation that has a strong logic and reason for its policy is a failed method."
He said due to the world's long-term need for energy, "It is not possible to impose sanctions on Iran," which has huge resources of oil and gas.
And two Iranian lawmakers threatened that their country would close the strait in retaliation for the EU embargo.
Lawmaker Mohammad Ismail Kowsari, deputy head of Iran's influential committee on national security, said Monday the strait "would definitely be closed if the sale of Iranian oil is violated in any way."
The strait - just 34 miles wide at its narrowest - runs alongside Iran and is the only way to get from the Persian Gulf to the open sea. The U.S. and Britain both have warned Iran not to disrupt the world's oil supply.