DUBAI (Reuters/AFP) - Iran pledged to counter the impact of a European Union oil embargo which took full effect on Sunday, saying it had built up $150 billion in foreign reserves to protect itself.
"We are implementing programmes to counter sanctions and we will confront these malicious policies," Mehr news agency quoted central bank governor Mahmoud Bahmani as saying. He said the effects of the sanctions were tough but that Iran had built up $150 billion in foreign reserves.
The European Union banned new contracts for imports of Iranian crude in January, but allowed existing ones to continue until July 1. EU firms are also barred from transporting Iranian crude or insuring shipments under the sanctions.
"They signal our clear determination to intensify the peaceful diplomatic pressure," British Foreign Secretary William Hague said in a statement.
So far, sanctions have not forced Iran into concessions on its nuclear programme - in fact it demands that they stop before it will take steps to curb uranium enrichment - and France and Britain have signaled more measures could come.
The United States has also imposed a new round of sanctions that could punish foreign countries dealing in Iranian oil, although it gave exemptions to 20 major oil buyers that are cutting purchases. "All possible options have been planned in government to counter sanctions," Iranian Oil Minister Rostam Qasemi said in comments on the ministry's website.
Qasemi said oil importers would be the big losers if a blockade leads to price rises. But there are signs of the embargo having an impact on Iran's economy.
Its crude oil exports - which according to EU estimates represent half the government's income - have fallen by 40 percent this year. Iran used to export a fifth of its crude to EU countries. The Iranian rial has fallen and inflation is running at over 20 percent. Tens of thousands of Iranians have lost their jobs and trade between Iran and Europe has halved in a year, according to Eurostat data from March.
In three rounds of negotiations, Western powers have demanded Tehran halt its high-grade uranium enrichment activities, ship all high-grade uranium out of the country and close down a key enrichment facility. But the talks have lost steam. At a meeting among political leaders in Moscow last month, there was not enough common ground for negotiators to agree yet whether to meet again.
Meanwhile, the White House welcomed Sunday's implementation of an EU embargo on Iranian oil, calling it "an essential part" of an international response to Tehran's nuclear program.
President Barack Obama's press secretary Jay Carney in a statement said the United States and the European Union were committed to holding Iran accountable "for failing to meet its international obligations."
"With this decision, our partners in the EU have underscored the seriousness with which the international community views the challenge of Iran's nuclear ambitions," Carney said.
He added: "This action is an essential part of our concerted diplomatic efforts to present Iran with a clear choice between isolation or meetings its obligations."
With expert-level talks set for this week in Istanbul, he said, Iran "must take concrete steps toward a comprehensive resolution of the international community's concerns with Iran's nuclear activities."