The authorities in the Islamic republic of Iran have announced a new military exercise in the Strait of Hormuz, through which a majority of the gulf oil passes to several countries.

As a response, the western powers are already preparing a stock of oil to avoid any disruptions in oil supply if the Islamic republic decided to block the strait. The International Energy Agency (IEA) is planning to release up to 14 million barrels per day (bpd) of government-owned oil stored in the United States, Europe, Japan and other countries.

The additional supply could offset the supply of 16 million barrels a day of crude, which passes through the Strait of Hormuz in the south of Iran. European countries have found a common ground and have agreed in principle to impose a ban on Iranian oil in order to show a united stance amid growing tensions with the Islamic republic's government.

Iran is suspected of covertly developing nuclear weapons, a charge it denies and maintains that it has the right to harness civilian nuclear energy for generating power. A final decision on the ban of Iranian oil is expected to be taken before the end of January and will be enforced in planned phases in order not to disrupt global oil supplies.

The combined tough stance is to force the Iranian authorities to stop enriching uranium and negotiate with the western powers to end its efforts of developing fuel for an alleged nuclear weapon.

Iran has responded to the threat of sanctions with a series of military and diplomatic threats including closing the Strait of Hormuz. It test fired new missiles and also announced the production of its first nuclear-fuel rod. The country has also warned against the return of an American aircraft carrier to the Persian Gulf.