EU members have agreed in principle to ban imports of crude oil from Iran to put pressure on the country over its nuclear programme.
The move is expected to be announced formally at a meeting of EU foreign ministers at the end of January.
Iran has dismissed the threat of new sanctions and denies Western claims that it is trying to develop a nuclear weapons programme.
On Tuesday France had called for "stricter sanctions" on Iran.
Foreign Minister Alain Juppe says he hopes the meeting on 30 January will confirm the decision on an embargo of fuel from Iran.
The BBC reports Iran gets more than half of its revenue through the export of crude oil. The EU currently accounts for around 17% of Iranian oil exports.
If Europe stops buying, Iran will have to turn to countries in Asia to replace its lost trade, who will demand a discount.