EU prepared to tighten sanctions on Iran

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The European Union expects to reach a decision by the end of January on expanding sanctions against Iran, an EU spokesman said amid new threats from Iran to test-fire long-range missiles.

Iran will test-fire two long range missiles today (2 January) during the last day of naval exercises in the Gulf, a naval commander said, following its threat to halt oil shipments through the Strait of Hormuz.

"Today we will test-fire Qader and Nour long range missiles during the drill," deputy navy Commander Mahmoud Mousavi told state TV.

On Saturday, US President Barack Obama signed new sanctions against Tehran.

"We expect a decision [on EU sanctions] to be ready at the latest by the next foreign affairs council on 30 January," EU foreign policy spokesman Michael Mann told Reuters.

The prospect of wider sanctions led Tehran to threaten to shut the Strait of Hormuz, through which 40% of the world's oil passes, if restrictions were imposed on its oil exports.

In turn, the US Fifth Fleet said it would not allow shipping to be disrupted in the Strait.

The latest US sanctions have a measure of flexibility and officials said Washington was trying to ensure they would not harm global energy markets, where oil prices are above $100 a barrel.

Hope for negotiations

Both the EU and the United States have said they are willing to hold talks with Iran on its controversial nuclear programme, provided they are meaningful and without preconditions.

Iran held the 10-day naval exercise at a time of increased tension with Western powers over its nuclear programme, and Mousavi said on Sunday it had successfully test-fired a medium range surface-to-air missile.

Tehran threatened last week to stop the flow of oil through the Strait of Hormuz if it became the target of an oil embargo over its nuclear ambitions. The EU has said it is considering a ban – already in place in the United States – on imports of Iranian crude.

The United States and Israel say they have not ruled out military action against Iran if diplomacy fails to resolve a dispute over the nuclear programme, which Tehran says is peaceful but the West believes is a cover for trying to build atomic bombs.

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