European Union governments agreed on Tuesday to bring forward a foreign ministers' meeting expected to decide on an oil embargo on Iran by one week to January 23, but were unable to agree when a ban should be imposed.

In a statement confirming the new date, the EU said the meeting was being brought forward from January 30 to avoid a clash with an EU summit set for that day.

EU states have already agreed in principle to ban imports of Iranian oil, part of efforts to increase pressure on Tehran over its nuclear programme, which the West suspects is aimed at producing atomic bombs but Iran says is entirely peaceful.

They have yet to work out when the ban will be imposed. Diplomats say there may be a delay of several months because some EU members want time to reduce any shocks to their already sluggish economies.

EU countries have proposed grace periods on existing contracts of between one month and 12 months to allow them to find other suppliers before implementing an embargo.

Greece, which depends heavily on Iranian crude, has been pushing for the longest delay, the diplomats said. Britain, France, the Netherlands and Germany have argued for a maximum grace period of three months.

EU states are also divided over whether to include Iran's central bank in sanctions on the financial sector. Diplomats said France and Britain backed this but Germany opposed the idea.

Sanctions agreed by the 27 EU states must normally be applied uniformly, but one diplomat said there had been some discussion of varying grace periods at the urging of Italy.


Diplomats said both France and Britain could be willing to agree to grace periods of up to six months, under certain conditions.

One diplomat said France was willing to be flexible provided the sanctions were extended to the central bank. Another diplomat said Germany wanted to target institutions financing Iran's nuclear programme but did not support steps that would hurt ordinary Iranians.

Legally speaking, it's not possible to have different grace periods for different countries, one diplomat said. But it could perhaps be possible to define more precisely which companies could be allowed, because of very special circumstances, to keep importing oil.

It's certainly not going to be easy to agree something like this, but that's the line the Italians are working on.

The diplomat said the talks were expected to continue until next week. The original goal was to reach a decision on January 30, but bringing forward the foreign ministers' meeting will increase pressure for an earlier compromise solution.

EU measures against Iran's oil industry will complement U.S. sanctions announced on December 31 that aim to make it impossible for most countries' refineries to buy Iranian crude.

Iran is OPEC's second largest oil producer after Saudi Arabia, producing around 3.5 million barrels per day.

EU countries buy nearly 600,000 barrels per day (bpd) of Iran's 2.6 million bpd in exports, making the bloc the largest market for Iranian crude, rivalling China.

The three biggest EU importers have serious debt problems. Greece imports a quarter of its oil from Iran, Italy about 13 percent and Spain nearly 10 percent.

(Writing by David Brunnstrom; editing by Tim Pearce)