This is a significant step forward in sanctioning Iran and will no doubt hurt the European driver at the pump.
But if we're going to stop Iran from building nukes short of war -- an admittedly slim chance -- it is sanctions like these that Iran opponents have been touting for years that might do the trick.
The European Union will announce tough new sanction on Iran's oil industry Monday.
According to a source familiar with the matter, the sanctions will ban the import of Iranian oil and also restrict Iran's trade in gold and precious metals, as well as freeze certain Iranian financial assets.
Of the 2.2. million barrels of oil Iran exports a day, about 18% is bound for European markets, according to the U.S. Energy Information Administration. The world consumes about 89 million barrels of oil per day.
Final details are still being worked out, and it's expected the sanctions will have a grace period of three to eight months, an EU diplomat told CNN.
The grace period will allow European refiners to find new suppliers and Iran to find new buyers.
The move, which was widely expected, follows similar actions by the United States and the United Kingdom. They are all aimed at increasing pressure on Tehran to give up its nuclear program, which Iran says is for peaceful purposes buy many suspect is intended to produce a bomb.
Do not automatically assume China will step in and pick up the slack in oil purchases for Iran. China's economy has begun to cool off and the demand might not be there. There's also the fact that China has other oil irons in the fire - especially in Brazil and Canada. Bottom line -- they just might not need Iranian oil.
There is also the prospect that the world will tumble into another recession, increasing the slack in oil markets. These sanctions have the real possibility of biting Iran hard. They are already making noises about sitting down with the west again to talk about their enrichment program. The EU and the US should stick to their guns and not sit down with them until they stop enriching uranium - no ifs, ands, or buts.
Otherwise, there will be war.