The Iranian government has spoken locally of a plan to block the Strait of Hormuz, which is critical to the oil trade, in retaliation to US and EU sanctions, reports the Financial Times.

The plan, which the government has so far only drafted, could “prevent passage of oil tankers carrying crude oil to the countries which had imposed sanctions against Tehran.” It has been signed by 100 lawmakers but will still go through parliament for approval and requires a nod from supreme leader Ayatollah Ali Khamenei.

Iran’s falling exports have caused oil prices to plunge, which prompted Tehran to meet with OPEC on possible measures. Financial Times figures show that ICE Brent Crude Oil fell $1.96 from $98 on Friday to $95.84. Goldman Sachs analysts forecast Iranian exports to lose as much as Libya in 2011 amid US and EU sanctions. Saudi Arabia doubled its crude production as sanctions cut Iranian oil from the market.

The strait, which connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, is the world’s most important oil route, with a daily flow of 17m barrels in 2011, 35% of all seaborne traded oil and 20% of total worldwide oil trade.