Luxembourg ? The European Union agreed Monday on the need to sharpen sanctions on Iran – possibly targeting the oil and gas sectors in what would mark Europe’s strongest punishments yet to discourage Tehran’s nuclear ambitions.

The EU’s tougher stance follows Iran’s latest refusal to accept economic incentives in exchange for halting uranium enrichment, which Tehran insists is for energy-producing reactors but Western nations and others fear could be used to develop nuclear weapons.

Washington’s European allies have been far more cautious on punishing Iran because of deep business and energy ties. But the latest move – which is not yet final – would strike directly at Iran’s economic base and its plans to expand gas and oil exports to Europe at a time of record-high prices.