WASHINGTON (Reuters) - The U.S. Senate gave unanimous approval on Monday to a package of new economic sanctions on Iran's oil sector just days ahead of a meeting in Baghdad between major world powers and Tehran.
The West suspects Iran is working to build a nuclear bomb and the sanctions are meant to strip Tehran of revenue by shutting down financial deals with Iran's powerful state oil and tanker enterprises. Iran has said its nuclear program is for civilian purposes.
The House of Representatives passed its version of the bill in December and now the Senate and House must work out their differences in the legislation.
"This bill is another tool that will demonstrate to Iran that the United States is not backing down," Robert Menendez, the Democratic senator who helped craft the legislation, said on the Senate floor.
Passing the bill ahead of the Baghdad meeting shows Iran that "buying time ... is just not going to work," Menendez said.
The new sanctions build on penalties signed into law by President Barack Obama in December against foreign institutions trading with Iran's central bank. Those sanctions already have cut deeply into Iran's oil trade.
The new package would extend sanctions to cover dealings with the National Iranian Oil Co and National Iranian Tanker Co, aiming to close a potential loophole that could have allowed Tehran, the world's third-largest petroleum exporter, to continue selling some of its oil.
The Senate bill was brought up on Thursday but was blocked by Republicans who wanted some parts toughened up. Senator John McCain said the revised bill shows "we need a comprehensive policy" to include economic sanctions, diplomacy, military planning capabilities and options.
Senate Republican Leader Mitch McConnell said the revisions show Iran "that all options are on the table, in order to prevent any contrary perception that silence on the use of force would have created."
The bill also includes language from Senator Rand Paul that it does not authorize force against Iran, a Paul spokeswoman said.
(Additional reporting by Timothy Gardner; Editing by Bill Trott)