EU to issue stronger Iran sanctions

U.S. President George W. Bush, left, is seen at a press conference with British Prime Minister Gordon Brown, right, at the Foreign and Commonwealth Office in London, Monday, June 16, 2008. Bush and British Prime Minister Gordon Brown used a joint news conference to show solidarity on an array of vexing foreign policy matters chiefly Iran, Iraq and Afghanistan. Bush dismissed reports he had differences with Brown on Iraq, where Britain has cut its troops. (AP Photo/Carl De Souza, Pool) (Carl De Souza - AP)

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The EU has not yet officially announced any new sanctions, but Brown said the EU "will agree." A senior British official, speaking on condition of anonymity in keeping with government policy, said the sanctions were expected to be formally adopted "in the next few days."

Cristina Gallach, spokeswoman for EU foreign affairs and security chief Javier Solana, said EU foreign ministers meeting in Luxembourg were prepared to take "a formal decision" on tighter sanctions.

"It is clear they are ready to move further," she said.

Solana failed last weekend to win Iran's support for a package of incentives to end uranium enrichment _ which Iran's leaders have declared is a point of national pride and a sign of the country's technological advances.

Matthew Levitt, a regional affairs expert at the Washington Institute for Near East Policy, said an EU-wide tightening of sanctions would send "a very, very powerful message."

"It is another brick in the isolation wall around Iran," said Mustafa el-Labbad, editor-in-chief of Sharqnameh, a Cairo-based magazine that focuses on Turkey and Iran.

But the scope of the expected EU sanctions is still unclear. European diplomats, speaking on condition of anonymity because of the sensitivity of the deliberations, said some divisions remained among the 27-nation bloc about how strong to move against Iran's energy sectors.

One concern is pushing oil prices even higher.

Crude oil futures hit a record of $139.89 a barrel on the New York Mercantile Exchange before falling back to $134.61. Retail gas prices rose to a record $4.08 a gallon.

Phil Flynn, analyst at Alaron Trading Corp. in Chicago, said sanctions could definitely push prices higher on worries that Iran could retaliate by pulling oil off world markets or attempting to choke off the Strait of Hormuz, the narrow outlet for tankers leaving the Persian Gulf.

"The market gets nervous ... they get worried about how Iran's going to respond," he said.

The sanctions _ the strongest yet against Iran _ would follow three sets of U.N. Security Council penalties Iran has shrugged off while continuing to enrich uranium.