Ambassadors from the 27 EU member states met in Brussels to endorse the sanctions, which include measures against the oil and gas industry and must be approved at a meeting of foreign ministers on July 19 to come into force.

The UN Security Council imposed a fourth set of sanctions on Iran in early June, but EU leaders and the United States decided shortly after to impose their own penalties against the Iranian energy sector.

The sanctions are part of a twin-track approach with EU foreign affairs chief Catherine Ashton seeking to revive moribund talks between Iran and six world powers -- the United States, Britain, France, Germany, Russia and China.

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

EU leaders agreed at a June 17 summit to impose a ban on new investment, technical assistance and technology transfers to Iran's huge gas and oil industry, particularly for refining and liquefied natural gas.

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

The US and EU sanctions, seen as much tougher than UN sanctions, were "expected to have a material impact on the country's energy industry," the International Energy Agency said.