The U.S. Senate unanimously approved economic sanctions on Iran Thursday, vowing to penalize foreign financial institutions which will do business with the country's central bank.

Iran insists its nuclear programme is for peaceful purposes only. [File photo]

The measures, passed by 100 votes to nil, targeted Iran's oil industry, despite that the country has warned that the move could backfire.

The sanctions must be approved by the House and President Barack Obama before becoming law. BBC reported that the president is skeptical.

Obama has been cautious about harsher sanctions, fearing such a move could disrupt the oil markets at a time of economic uncertainty for many Americans, and alienate potential allies, BBC said.

The sanctions were approved as an amendment to a huge defense bill that passed the Senate on the same day.

As the U.S. has already barred its own banks from doing business with the Iranian central bank, the new sanctions would be aimed at discouraging other foreign banks from doing so, Xinhua said.

Earlier on Thursday, the EU extended its sanctions against Iran, in response to protesters storming the British embassy in Tehran Tuesday and Iran's alleged nuclear ambitions.

Diplomats at the Iranian embassy in London were ordered to leave Britain by Friday afternoon.