AS a new European Union oil embargo on Iran goes into effect, the country’s oil minister and central bank governor have promised that the economy will easily survive."The sanctions have had no effect on Iran and will have none,” Oil Minister Rostam Qasemi told the ISNA news agency on Sunday. He was also quoted on the website of state broadcaster IRIB as saying that "these sanctions have existed for many years and nothing has happened, and one should not anticipate anything new”.But oil market observer bodies and analysts say that the embargo, coupled with US financial sanctions ramped up on Thursday, will increasingly gut Iran’s vital oil exports.The International Energy Agency says Iran crude exports in May appeared to have slipped to 1.5 million barrels per day as the market braced for the embargo - well below the 2.1 to 2.2 million barrels Iran insists it continues to sell abroad.Iran is the second largest producer in OPEC and earns about 80 per cent of its foreign revenue from exporting crude. Oil accounts for about half of all government revenues.The EU measures are intended to pressure Iran over fears that it is developing nuclear weapons. Iran denies the charges.‘Illogical’ embargoMahmoud Bahmani, the central bank governor, told the semiofficial Mehr news agency on Sunday that Iran will "confront” hostile policies and has enough hard currency reserves to meet its import needs.Qasemi and other officials admitted the "illogical” embargo had reduced exports to EU nations, but they said other nations had stepped forward to buy the oil."While we collectively exported 18 per cent of our oil to them before, it is not difficult to substitute customers for this much oil in the world,” Qasemi said. It was not possible to verify that claim because Iran has turned off the mandatory location transponders on most of its fleet of 39 oil tankers.The IEA and experts say most of the tankers remain anchored off Iran and are being used to store up to 42 million barrels of oil unable to be exported.Mehrdad Khonsari, a former Iranian diplomat, told Al Jazeera that the country still exports a significant amount of oil but that the new embargo will make a bad situation worse."The fact is that the government does not need to crumble for it and the Iranian people to feel the pressures of the sanctions,” he said.