Iran's parliament is to discuss a bill Sunday that seeks to halt its oil exports to the European Union (EU).

The bill calls for a ban of oil exports to the EU as early as next week, Hossein Ebrahimi, deputy head of the Majlis (parliament) National Security and Foreign Policy Committee, said.

The development comes after the Eropean Union Monday announced to embargo Iran's oil. The embargo will come into force July 1.

Ebrahimi has called the sanctions a "psychological war", Xinhua quoted the Press TV as saying Friday.

Tehran has threatened to close the Strait of Hormuz, a key shipping lane for oil trade, in retaliation.

Major EU importers of Iran's oil, such as Greece, Italy and Spain, have until July 1 to find alternative suppliers.