The European Union will announce tough new sanction on Iran's oil industry Monday.

According to a source familiar with the matter, the sanctions will ban the import of Iranian oil and also restrict Iran's trade in gold and precious metals, as well as freeze certain Iranian financial assets.

Of the 2.2. million barrels of oil Iran exports a day, about 18% is bound for European markets, according to the U.S. Energy Information Administration. The world consumes about 89 million barrels of oil per day.

Final details are still being worked out, and it's expected the sanctions will have a grace period of three to eight months, an EU diplomat told CNN.

The grace period will allow European refiners to find new suppliers and Iran to find new buyers.

The move, which was widely expected, follows similar actions by the United States and the United Kingdom. They are all aimed at increasing pressure on Tehran to give up its nuclear program, which Iran says is for peaceful purposes buy many suspect is intended to produce a bomb.

The Iranian government gets about half its revenue from oil exports, according to the EIA.

Analysts have said that while the new sanctions, are the toughest ever imposed, they still contain many loopholes.

Iran is expected to still be able to sell its oil to places like China, India or other Asian countries, but perhaps at a discount of 10% to 15%. About 35% of Iran's oil exports currently go to China and India.

Western leaders have been walking a fine line with Iran, working to come up with a plan that squeezes the country's finances yet doesn't result in a loss of Iranian oil exports, which could send crude and gasoline prices skyrocketing.

With reporting in London from CNN producer David Wilkinson