The European Union’s ban on imports of Iranian crude will drive up oil prices and aggravate market instability, the Islamic Republic said.

The decision by EU foreign ministers to phase out purchases of Iranian oil from July was “hasty” and may lead to “heavy economic loss and damages to the crisis-stricken people of Europe,” the Iranian oil ministry said in a statement on the state-run Fars news agency late yesterday, January 23rd, 2012. Iran’s foreign ministry said the decision “would bear bitter fruit.”

The EU ban is part of efforts by the bloc and the U.S. to pressure the Persian Gulf state over a nuclear program that Western nations say is aimed at producing weapons. Iran says the program is for civilian energy and medical purposes. The EU measures include freezing assets of the Iranian central bank in Europe and banning trade in petrochemicals from Iran.

“They were rattled by the EU actions and their ability to reach a clear consensus, so these statements seem like more bluster to reassure a domestic audience,” Robin Mills, an analyst at Manaar Energy Consulting in Dubai, said today.

Crude gained since the middle of last month, partly because of concern that Iran may close the Strait of Hormuz, the passage for about 20 percent of the world’s oil. The risk of such a disruption is already included in prices, adding $10 a barrel this month, Ole Hansen, trading-advisory manager at Saxo Bank A/S, said. A closure of Hormuz, though “unlikely,” could cause crude to jump by $20 to $40, he said.

The Iranian ministry’s comments may point to an easing in tension between the West and Iran as the Islamic Republic may seek alternative customers before the EU embargo comes into effect, said Manaar Energy’s Mills, who worked on Iran for a decade with Royal Dutch Shell Plc.

“If they are able to find buyers without having to offer too much in the way of discounts, they won’t have much of a problem with the embargo come June,” Mills said.

Crude futures closed yesterday at 99.58 a barrel on the New York Mercantile Exchange. That’s less than the closing level on Dec. 27, when Iran threatened to blockade shipments from the Persian Gulf. Crude contracts for March delivery were trading at $99.36 a barrel at 8:28 a.m. in New York.