Iran Votes to Expel U.K. Envoy

By BENOIT FAUCON, LAURENCE NORMAN and MAX COLCHESTER

BRUSSELS—As European Union officials prepared to meet this week on a French-led effort to ban Iranian oil imports, Tehran ratcheted up tensions with the West by voting to expel its British ambassador.
Tehran's decision was seen as a reaction to London's support of new U.S. measures, coordinated with Britain and Canada, to target Iran's banks, petrochemical industries and companies involved in nuclear procurement or enrichment activity.
London's foreign office called the vote to expel Dominick John Chilcott, "regrettable."
"This unwarranted move will do nothing to help the regime address their growing isolation or international concerns about their nuclear program and human-rights record," a representative said. "If the Iranian Government acts on this, we will respond robustly in consultation with our international partners."
EU foreign ministers were preparing to meet Thursday to seek a political consensus on the measure to ban oil imports.
"There is a real intent to do this and this is a sector where the Iranians would really be hurt," said one Brussels official.
Over the weekend, Tehran reacted by saying it wouldn't be hurt by the proposed European oil ban.
On Sunday, state-run media quoted Emad Hosseini, spokesman for Iran's parliamentary energy commission, as saying "if these countries \[in Europe\] don't want to buy this much either, it will not have any impact on Iran's economy."
In an interview Saturday, Iran's governor for the Organization of Petroleum Exporting Countries, Muhammad Ali Khatibi, said such a ban would hit consumers by boosting oil prices. "I am sure the final consumer will pay for the cost," he said. Iran holds OPEC's rotating presidency. Mr. Khatibi said energy insecurity-including the impact of the mulled European embargo-may be debated when OPEC next meets on Dec 14.
While denying Iran is building a nuclear bomb, president Mahmoud Ahmadinejad warned Saturday that sanctions would complicate talks with the West. "They make it hard for themselves by taking measures against Iran," he told a state-run television network.
EU diplomats cautioned that any final decision was at least a few weeks away and that it was too early to gauge potential opposition in the 27-member body.
The push for wider sanctions on Iran comes after an International Atomic Energy report this month said the agency was "profoundly and increasingly worried" about Iran's alleged attempt at building a nuclear weapon. Iran says its nuclear program is for peaceful purposes.
EU officials say efforts to engage Iran diplomatically on its nuclear program have gone nowhere since talks in January, necessitating increased pressure.
While the U.S. government has banned all trade and financial transactions with Iran since 1995, France and other EU members still trade with Iran. Sanctions imposed by EU countries, like those adopted by the United Nations, center on banning exports to Iran of weapons and goods that can be used in weapons manufacturing. Still, the EU has gradually tightened some sanctions in recent years in response to Iran's alleged nuclear efforts, barring companies such as Royal Dutch Shell PLC and Total SA from undertaking upstream investment in the country.
The EU this year banned Syrian oil imports, but Iran is a far bigger source of oil into Europe, accounting for as much as 18% of the imports of some European countries.
Some experts said the cost of sanctions designed to hurt Iran's economy could still boomerang on Western consumers. The move "would tighten the European crude market considerably and lead to even higher prices for medium-sour crude," Vienna-based consultancy JBC Energy GmbH said in a note last week.
Oil prices were calmer Friday after jumping the day before on headlines that France planned a unilateral embargo on Iranian crude. French officials later clarified their position to say they would work through the EU. On Friday, a French diplomat reiterated the need for "unprecedented" sanctions on Iran and said the country's diplomats were lobbying their colleagues in the EU.
"What concerns us is not the price of petrol in France; it's a report that says Iran is working on nuclear weapons," the French Foreign Ministry spokesman said.
http://online.wsj.com/article/SB10001424052970204753404577064253076912554.html?mod=googlenews_wsj