Washington, Mar 31 (IANS): US President Barack Obama has approved new sanctions against Iran, saying there was sufficient oil in the world market to allow countries to cut Iranian crude imports.

According to Al Jazeera TV, Obama said in a statement Friday that the global economic conditions, increased production (of crude oil) by some countries and "the existence of strategic reserves" meant US allies boycotting Iranian crude would not be harmed by the sanctions.

Obama said he would "closely monitor" the global market to ensure it could accommodate a reduction in purchases of Iranian oil, RIA Novosti reported.

"I will closely monitor this situation to assure that the market can continue to accommodate a reduction in purchases of petroleum and petroleum products from Iran," Obama was quoted as saying by Xinhua.

Iran has the world's third-largest oil reserves.

The sanctions are aimed at pressuring Iran to abandon its disputed uranium enrichment programme.

Western powers suspect Iran of seeking to create a nuclear bomb. Iran says the programme is designed solely for the production of civilian energy.

Under a new law passed by the US, countries risk being cut off from the American financial system if they fail to show by June 28 a significant reduction in the amount of Iranian crude imports.

Washington has given exemption from the sanctions to Japan and 10 European Union nations because they have already taken steps to cut back.

EU members states have agreed to stop importing Iranian oil from July 1. The EU currently accounts for 20 percent of Iran's oil exports.

According to Xinhua, the US is currently talking with India, China, Turkey and South Korea to persuade them to reduce dependence on Iran's oil.

The Obama administration can slap sanctions after June 28 on foreign banks that engage in oil transactions with Iran's central bank and cut them off from the American financial system.