File photo taken on Dec. 29, 2010 shows a view of Abadan refinery, the largest one in Iran, in southwestern Iranian city of Abadan. Iran's Oil Ministry said that the recent oil embargo of European Union (EU) on Iran will have negative impacts on European countries as well as other nations, the local satellite Press TV reported on Jan. 24. (Xinhua/Ahmad Halabisaz)

The European Union on Monday agreed to place an embargo on Iran's oil exports, as well as a number of other financial sanctions, dealing yet another heavy blow to Tehran after U.S. sanctions were applied last December.

The new sanctions directly target the heart of Iran's national economy, crude oil, and bring the EU and the United States together in ramping up their pressure over the country's nuclear development program.

Will the new round of sanctions bring Iran to heel? The answer is hard to predict at present, but it would certainly inflict heavy losses on the country's economy.

CONDEMNATION OF SANCTIONS, POSITION UNSWAYED

Iran's Foreign Ministry responded immediately after the sanctions were announced, slamming the decision as "illogical and unjustifiable."

Emphasizing again the "peaceful nature" of its nuclear program, the ministry's statement said Iran would not "succumb to such methods".

Foreign Ministry spokesman Ramin Mehmanparast dismissed the EU sanctions as "psychological warfare" and warned European countries to think about their own interests when faced with an economic crisis.

Iran's former oil minister, Kazem Vaziri-Hamaneh, said the embargo would lead to a sudden rise in oil prices and "Europe should be confident that Iran's oil will not remain without customers."

Two days before the new sanctions were announced, Iranian President Mahmoud Ahmadinejad said his country would respond to any threat and aggression accordingly. "Unjust sanctions imposed by the hegemonies on Iran have had ... no impact on the Iranian nation," the semi-official Mehr news agency quoted him as saying in a recent interview with a Mexican television network.

Those statements, as observers pointed out, showed Iran's strong position against the new sanctions. As a nation aiming for a full mastery of nuclear technologies and a complete nuclear industry as part of its national pride and identity as a regional power, it is difficult to tell whether the new sanctions will end Iran's nuclear plan.

IRAN TAKES ACTION AMID PRESSURE

According to analysts, pressure on Iran's economy will be significantly increased under the EU sanctions. However, Iran will try to reduce its losses and ease its tensions with Western countries.

As figures from the International Monetary Fund (IMF) show, Iran's oil exports have been constantly rising since 2000, which serves a strong backup of Iranian government's confrontation with the Western powers.

Iran now exports 2.6 million barrels of crude oil per day, of which 20 percent is exported to Europe. Under pressure from the United States, analysts said Iran will start mediation with other customers, such as Turkey, Japan, South Korea and India, to keep the other 80 percent.

On the diplomatic front, since Jan. 5, Iran has repeatedly called for resuming negotiations over its nuclear program.

SANCTIONS LEAVE ROOM FOR MANOEUVRE

Though the new round of sanctions is tough, the move is believed to have left some room for manoeuvre: the decision rules that countries with existing contracts with Iran can extend their deals until July 1, and "legal trades" are allowed to continue under strict supervision.

The intention behind its "mercy," according to some European experts on international affairs, is to avoid increasing tension with Iran, as well as to protect the EU's own economic interests.

"The EU is already engaged in too many economic issues to allow it to spend that much time in trying to convince other countries not to buy Iranian crude," Amanda Paul, an analyst at the European Policy Center, told Xinhua.

Although the international oil price did not see an immediate sharp increase after the new sanctions, the prices of crude oil may still go up in the medium term, according to experts. Iran's nuclear issues are not expected to be addressed within a few months, so market expectations of international oil price rises will be increased, experts said.