The European Union has banned new purchases of Iranian oil and frozen the assets of Iran's central bank, as part of a Western campaign to pressure Tehran to suspend controversial parts of its nuclear program.

EU foreign ministers agreed to the new sanctions at a meeting in Brussels on Monday. They agreed to allow EU nations with existing contracts for Iranian oil to honor those purchases until July 1. The grace period is meant to help major buyers of Iranian oil such as Greece to find alternative sources of supply before the full ban takes effect.

The 27-nation EU also agreed to stop all trade in gold and other precious metals with Iranian state institutions. The EU and the United States have been tightening unilateral sanctions on Iran in recent weeks in response to Iranian moves to accelerate uranium enrichment.

Western powers accuse Iran of trying to develop nuclear weapons under cover of a civilian energy program, a charge Tehran denies.

Iran's economy is heavily reliant on revenue from oil exports. The EU has been the second largest market for Iranian oil after China.

EU and US sanctions have prompted a dramatic weakening in the value of Iran's currency, the rial. In black market trading on Monday, the rial dropped to a new record low of 20,500 to the dollar, a slump of more than 12-percent from last week.

Iranian lawmakers reacted angrily to the new EU sanctions. Deputy head of parliament's national security committee Mohammad Ismail Kowsari repeated Iranian threats to close the Strait of Hormuz, a vital pathway for global oil supplies. He said any disruption to Iranian oil exports “definitely” will lead to the closure of the Strait.

Another lawmaker serving on parliament's energy commission predicted the EU oil embargo will have “no impact” on the Iranian economy because Iran will find other customers for its oil exports. Ali Adyani said the only negative impact of the sanctions will be on Western countries that will have to cope with higher oil prices.

Russian Foreign Minister Sergei Lavrov criticized the EU embargo. Speaking Monday, he said unilateral sanctions will not help to revive negotiations between Iran and six world powers on the Iranian nuclear program. Those talks have been on hold for a year, but Lavrov said he is hopeful they will resume soon.

Russia and China supported several rounds of U.N. Security Council sanctions on Iran but oppose further measures, saying all parties should focus on negotiations. Moscow and Beijing both have close economic ties to Tehran.