Iran has dismissed threat brought by the sanctions, although the Iranian currency, the rial, has lost about 12% of its value since they were applied.

It also denies the West’s suspicions that it is producing nuclear weapons. Foreign Ministry spokesman Ramin Mehmanparast said Wednesday that Iran’s nuclear program is totally peaceful and is a basic right of the nation.

But the news of the EU embargo caused oil prices to spike, with Brent crude peaking at nearly 114 US dollars a barrel in intraday trading, up nearly 2% from Tuesday’s close.

As the EU currently accounts for around 17% of Iranian oil exports, some hold the embargo may force Iran to find new buyers.