TEHRAN, Iran -- As new European Union sanctions targeting Iran's vital oil industry took effect yesterday, Tehran acknowledged that the measures aimed at reining in its disputed nuclear program were taking a toll.

The ban by the 27-member EU on the purchase of Iranian oil dealt the Islamic Republic its second economic setback in days, following fresh U.S. sanctions that prohibit the world's banks from completing oil transactions with Iranian banks. Combined, the measures significantly ratchet up the pressure on an Iranian economy already squeezed by previous rounds of sanctions.

"Today, we are facing the heaviest of sanctions, and we ask people to help officials in this battle," Vice President Mohammad Reza Rahimi was quoted as saying on state television's website.

He said the "dastardly sanctions" might cause "occasional confusion" in the domestic market. Rahimi said imported goods and hard currency had been stockpiled to help cushion the blow to the economy.

Iran had reacted furiously when the U.S. and EU sanctions were announced, threatening to block the strategic Strait of Hormuz, a vital waterway used to ship about one-fifth of the world's oil. Yesterday, Iranian officials appeared to be backing away from that threat, which roiled international oil markets at the time.

The EU, which accounted for around 18 percent of Iran's oil exports, said earlier this week that all contracts for importing Iranian oil will have to be terminated beginning yesterday. Also, European companies will no longer be involved in insuring Iranian oil.

In Washington, White House spokesman Jay Carney welcomed the EU oil embargo. He said in a statement that the United States and the EU "are committed to holding Iran accountable for failing to meet its international obligations," showing "the seriousness with which the international community views the challenge of Iran's nuclear ambitions."

Iran has the second-largest OPEC oil output, producing about 4 million barrels a day. The country's recoverable oil reserves are estimated at more than 137 billion barrels, or 12 percent of the world's overall reserves. The country relies on oil exports for about 80 percent of its public revenue. Most of Iran's crude production is used domestically, however.

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