BRUSSELS (AP) -- The European Union formally adopted an oil embargo against Iran on Monday and froze the assets of Iran's central bank, part of sanctions to pressure Tehran into resuming talks on its controversial nuclear program.
Diplomats said the measures, approved in Brussels by the EU's 27 foreign ministers, include an immediate embargo on new contracts for crude oil and petroleum products. Existing contracts with Iran will be allowed to run until July.
Some 80 percent of Iran's oil revenue comes from exports and any measures or sanctions taken that affect its ability to export oil could hit hard at its economy. With about 4 million barrels per day, Iran is the second largest producer in OPEC.
Iran says its nuclear program is peaceful, but the United States and other nations suspect it is trying to build nuclear weapons. Iran is now under several rounds of U.N. sanctions for not being more forthcoming about its nuclear program.
Two Iranian lawmakers, meanwhile, stepped up threats that their country would shutter the strategic Strait of Hormuz, through which a fifth of the world's crude flows, in retaliation for the EU oil sanctions on Tehran.
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."
Tensions over the strait and the potential impact its closure would have on global oil supplies and the price of crude have weighed heavily on consumers and traders. Both the U.S. and Britain have warned Iran not to disrupt the world's oil supply.
Many analysts doubt that Iran could set up a blockade for long, but any supply shortages would cause world oil supplies to tighten temporarily.
For its part, the United States has enacted, but not yet put into force, sanctions targeting Iran's central bank and, by extension, the country's ability to be paid for its oil.
After news of the EU move, benchmark crude for March delivery rose 90 cents higher on the day at $99.23 a barrel in early morning European time in electronic trading on the New York Mercantile Exchange.
Brent crude was down 35 cents at $109.51 a barrel on the ICE futures exchange in London.
EU diplomats are calling the measure part of a twin track approach toward Iran: increase sanctions to discourage what they suspect is Iran pursuit of nuclear weapons but to emphasize at the same time the international community's willingness to talk.
Iran says its nuclear program is exclusively for peaceful purposes, but EU foreign ministers are not convinced.
"The recent start of operations of enrichment of uranium to a level of up to 20 percent in the deeply buried underground facility in Fordow near Qom further aggravates concerns about the possible military dimensions to Iran's nuclear program," they said in a statement.
That accelerated enrichment is in violation of six U.N. Security Council resolutions and 11 resolutions by the board of the International Atomic Energy Agency, "and contributes to rising tensions in the region," the statement said.
British Foreign Secretary William Hague called the embargo part of "an unprecedented set of sanctions."
"I think this shows the resolve of the European Union on this issue," Hague said.
The EU also agreed to freeze the assets of the Iranian central bank. Together, the two measures are intended not only to pressure Iran to agree to talks but also to choke of funding for its nuclear activities.
In October, EU foreign policy chief Catherine Ashton sent a letter to Saeed Jalili, Iran's top nuclear negotiator, saying her goal was a negotiated solution that "restores international confidence in the exclusively peaceful nature of Iran's nuclear program."
She says she has not yet received a reply.
Ahead of Monday's decision, negotiators worked hard to try to ensure that the embargo would punish only Iran -- and not EU member Greece, which is in dire financial trouble and relies heavily on low-priced Iranian oil.
The foreign ministers agreed to a review of the effects of the sanctions, to be completed by May 1. And they agreed in principle to make up the costs that Greece incurs as a result of the embargo.
"It is important to know what will happen to individual countries as a consequence of the sanctions," Ashton said before the meeting.
The National Council of Resistance of Iran, an exile group opposed to Iran's clerical regime, welcomed the new sanctions and called for their implementation without delay.
"For over two decades, the Iranian Resistance has called for comprehensive oil and financial sanctions against the religious and terrorist dictatorship ruling Iran," Maryam Rajavi, the organization's president-elect said in a statement.
He said "the five-month delay in putting these sanctions in full force provides a significant amount of time for this regime to implement its ominous plots."
The council, founded in 1981, is considered a terrorist organization by the United States, but not by the European Union.
German Foreign Minister Guido Westerwelle said it was critical that action be taken.
"This is not a question of security in the region," he said. "It is a question of security in the world."
Raf Casert contributed to this report