The European Union agreed on Monady on sanctioning Iran's oil exports and freezing assets of Iran's central bank, as part of western efforts to pressure Tehran to make concessions in its controversial nuclear programme.
The measures include an immediate ban on new contracts for Iranian crude oil and petroleum products. Existing contracts will be allowed to run until July.
Some 80 per cent of Iran's foreign revenue comes from oil exports and any measures or sanctions that affect its ability to export oil could hit its economy hard. With output of about 4 million barrels per day, Iran is the second largest producer in Opec.
While the new sanctions are expected to be "painful" for such an oil-rich country, they are not likely to lead to a major shift in Iran's nuclear behaviour especially as Tehran still has the support of some other powers, mainly Russia, political experts say.
"Imposing sanctions on Iran's oil constitutes a major threat to the [country's] economy," said Cairo-based expert on Iran affairs Ahmad Kamel.
"But the problem with the European Union move, despite its importance, is the level of commitment of some [other] countries that have agreements with Iran, mainly Russia and China," Kamel told Gulf News.
"If both Russia and China are not committed to these sanctions, I believe its impact will be very limited."
The EU imported some 600,000 barrels of Iranian oil per day in the first 10 months of last year, making it a key market alongside India and China, which coolly reacted to American pressure to stop oil imports from Iran.
The European sanctions are "painful for any economy" including Iran, as it targets boycotting the oil sector, freezing dealings with the central bank and halting gold commerce, noted Mahjoub Zweiri, a political expert at Qatar University.
However, the "European move is gradual, not immediate. The oil embargo could take more than 6 months to go into effect", Zweiri explained to Gulf News.
Zweiri, moreover, doubts a shift in Iran's nuclear plans, which is the aim of the European move. Tehran's nuclear programme has raised fears in western circles that it is intended to make a nuclear bomb.
"The pressure of sanctions is designed to try and make sure that Iran takes seriously our request to come to the table," EU foreign policy chief Catherine Ashton said.
The European sanctions come after a set of American sanctions were passed recently.
"Since the beginning of its nuclear programme in 2002, Iran hasn't made any clear concessions. On the contrary, the more pressures it is subjected to, the more it talks about new [nuclear] breakthroughs," said Zweiri.