Tehran: Iran has halted its limited oil sales to France and Britain in retaliation for a phased EU ban on Iranian oil that is yet to take full effect, the oil ministry said on Sunday.

"Oil sales to British and French companies have ceased,"

Spokesman Ali Reza Nikzad Rahbar said in a statement on the ministry's official website.

"We have taken steps to deliver our oil to other countries in the place of British and French companies," he said.

The decision was not expected to have a big impact. France last year bought only three per cent of its oil --58,000 barrels a day -- from the Islamic republic, and Britain was believed to be no longer importing Iranian oil. But it was seen as a warning shot to other EU nations that are bigger consumers of Iranian oil, including Italy, Spain and Greece.

Although those countries were not affected by Iran's announcement today, they are included in an EU decision to stop buying Iranian oil that was announced last month and which will take full effect from July.

According to the International Energy Agency, Italy sourced 13 per cent of its oil, or 185,000 barrels per day, from Iran, while Spain imported 12 per cent of its oil needs, or 161,000 bpd, and Greece bought 30 per cent of its needs, or 103,000 bpd.

Iran, OPEC's second-biggest exporter after Saudi Arabia, pumps 3.5 million bpd of which it exports 2.5 million barrels.

Seventy per cent of the exports go to Asian countries, China and India especially. More than 20 per cent, or around 600,000 barrels per day, go to the European Union.

Iran has been threatening for weeks to cut all oil exports to Europe because of the EU ban, but has thus far held off. Ceasing all exports to the EU would harm its own economy unless it had Asian buyers ready to pick up the contracts.