The European Union tightened the screws on Iran Monday as foreign ministers met to slap tough sanctions on its oil sector in a bid to coax Tehran back to nuclear negotiations. The EU and the U.S. decided last month to hit Iran with their own sets of measures against the Iranian energy sector, which go beyond a fourth set of United Nations sanctions imposed over Tehran's refusal to freeze nuclear work
The European Union tightened the screws on Iran Monday as foreign ministers met to slap tough sanctions on its oil sector in a bid to coax Tehran back to nuclear negotiations.

The EU and the U.S. decided last month to hit Iran with their own sets of measures against the Iranian energy sector, which go beyond a fourth set of United Nations sanctions imposed over Tehran's refusal to freeze nuclear work.

The European sanctions are part of a dual-track approach, with EU foreign affairs chief Catherine Ashton seeking to revive moribund talks between Iran and six world powers--U.K., China, France, Germany, Russia and the U.S.

"We want to see dialogue on nuclear weapons capability to start as soon as possible in order to reach an agreement," Ashton told reporters ahead of a meeting in Brussels to formally approve the sanctions.

"Until we get to that point we will continue to take our responsibilities seriously. We will discuss today sanctions. (The) purpose of those sanctions is to persuade Iran, 'we need to discuss this issue, and move forward,'" she said.

Ashton has exchanged letters with Iran's chief nuclear negotiator Saeed Jalili in recent weeks in a bid to revive talks, and Tehran has indicated that the talks could resume in September.

The last high-level meeting between Iran and the six world powers were held in Geneva in October 2009 when the two sides agreed a nuclear fuel swap that has since stalled.

"We are adopting an extended-hand policy, but Iran would also have to grab it," Werner Hoyer, the German deputy foreign minister, told reporters.

"I think that some in Iran were not expecting the European Union to adopt such sanctions. They are starting to think in Iran," he said.

Iranian Foreign Minister Manouchehr Mottaki said at the weekend that Tehran was ready to hold immediate talks on a nuclear swap deal brokered by Turkey and Brazil in May and would convey that message in a letter to the U.N. nuclear agency Monday.

That deal, a counter-proposal to the October 2009 agreement, has been cold-shouldered by world powers.

Western powers have demanded that Iran suspend its uranium enrichment programme, fearing that Tehran would use the material to build a nuclear bomb. Tehran says its atomic programme is a peaceful drive to produce energy.

Swedish Foreign Minister Carl Bildt said sanctions alone would not be enough to resolve the nuclear dispute.

"I have yet to meet anyone who thinks that this issue will be sorted out by sanctions alone. So I think that we'll have to look at the different ways with which we can strengthen and emphasize the diplomatic track," Bildt said.

The new EU sanctions include a ban on the sale of equipment, technology and services to Iran's energy sector, hitting activities in refining, liquefied natural gas, exploration and production, diplomats said.

The EU will ban dual-use goods that can be used for conventional weapons. It will also step up vigilance of the activities of Iranian-connected banks operating in the EU and bar them from setting up branches.

Iran is the world's fourth largest producer of crude oil, but imports 40% of its fuel needs because it lacks enough refining capabilities to meet demand.

The unilateral U.S. and EU sanctions are "expected to have a material impact on the country's energy industry," the International Energy Agency said last week.

"These sanctions are surprisingly strong," said Mark Fitzpatrick, director of the nonproliferation programme at the International Institute for Strategic Studies in London. "They go much further than the U.N. sanctions."