The EU has agreed to impose an oil embargo on Iran, which will take effect from 24 January.

EU foreign ministers met in Brussels to discuss the embargo. In line with the decision, no further oil contracts can be signed between EU member states and Iran, although existing oil delivery deals will be allowed to run until July. This means that the full impact of the embargo will not be clear until the summer.

In response to the decision, Tehran increased its threats to close the Strait of Hormuz through which a fifth of global oil supplies passes. Ivo Daalder, UN ambassador to Nato in Brussels, says that Washington and its allies will keep the strait open to international shipping and the oil industry.

Oil prices jumped after the EU’s move to clampdown on Iranian oil imports. Brent crude oil prices for March rose by $0.72 to settle at $110.58 a barrel from $109.86 on 20 January.

With Tehran’s refusal to abandon its nuclear programme, the US already tightened sanctions against Iran’s central bank in November 2011. The UN energy watchdog, the International Atomic Energy Agency, is sending a team to Iran between 29 and 31 January “to resolve all outstanding substantive issues”.