Obama approves new Iran oil sanctions

US President Barack Obama is moving ahead with new sanctions aimed at squeezing Iran's oil exports after determining there is enough crude on world markets to take the step without harming Washington's allies.

Obama's move, announced on Friday, allows the US to go forward with sanctions on foreign banks that continue to purchase oil from Iran.

The move would allow the US to take measures against foreign banks that still deal with Iranian oil.

Iran is facing international pressure to address concerns over its nuclear enrichment programme.

Western countries suspect Iran of attempting to develop a nuclear weapon. Iran insists the programme is purely peaceful.

The measures aim to further isolate Iran's central bank, which processes nearly all of the country's oil purchases, from the global economy.

US officials hope ratcheting up economic pressure will both push Iran to abandon its controversial nuclear programme and convince Israel to give sanctions time to take hold before pursuing a threatened military strike on Iran's nuclear facilities.

Under a sweeping defence bill Obama signed at the end of December, the president had until Friday to determine if there was enough oil supply on the world market to allow countries to cut their oil purchases from Iran.

The president said he based his determination on global economic conditions, the level of spare oil capacity and increased production by some countries, among other factors.

He said he would keep monitoring the global market closely to ensure it could handle a reduction of oil purchases from Iran.

With oil prices already rising this year amid rising tensionsbetween Iran and the West, US officials have sought assurances that pushing countries to stop buying from Iran would not cause a further spike in prices.

That is particularly important for Obama in an election year that has seen an increasing focus on gas prices.

The congressionally mandated sanctions target foreign financial institutions that do business with Iran's central bank, barring them from operating in the US to buy or sell Iranian oil.