Julie Pace and Ben Feller

WASHINGTON: President Barack Obama is moving ahead with tough new sanctions aimed at squeezing Iranís oil exports after determining there is enough crude on world markets to take the step without harming U.S. allies.

Obamaís move, announced Friday, allows the United States to go forward with sanctions on foreign banks that continue to purchase oil from Iran. The sanctions aim to further isolate Iranís central bank, which processes nearly all of the Islamic Republicís oil purchases, from the global economy.

U.S. officials hope ratcheting up economic pressure will both push Iran to abandon its disputed nuclear program and persuade Israel to give sanctions time to take hold before pursuing a military strike on Iranís nuclear facilities. The United States and allies believe that Iran is pursuing a nuclear bomb; Iran denies that.

Under a sweeping defense bill Obama signed at the end of December, he had until Friday to determine if there was enough oil supply on the world market to allow countries to cut their oil purchases from Iran.

Obama said he based his determination on global economic conditions, the level of spare oil capacity and increased production by some countries, among other factors. He said he would keep monitoring the global market closely to ensure it can handle a reduction of oil purchases from Iran.

With oil prices already rising this year amid rising tensions over the nuclear dispute between Iran and the west, U.S. officials have sought assurances that pushing countries to stop buying from Iran would not cause a further spike in prices.

Thatís particularly important for Obama in an election year that has seen an increasing focus on gas prices.

The congressionally mandated sanctions target foreign financial institutions that do business with Iranís central bank ó barring them from operating in the United States to buy or sell Iranian oil. The penalties are to take effect at the end of June, around the same time Europeís embargo on Iranian oil kicks in.