Iran makes nuclear fuel breakthrough Iran makes nuclear fuel breakthrough - Oil & energy updated 20 minutes ago Oil & energy Technological advance comes amid fear country is developing atomic weapons msnbc.com news services TEHRAN, Iran - Iranian scientists have produced the nation's first nuclear fuel rod, a feat of engineering the West doubted Tehran was capable of, Iran officials said Sunday. The announcement comes after Iran has said it was compelled to manufacture fuel rods on its own since international sanctions banned Tehran from buying them on foreign markets. Nuclear fuel rods contain pellets of enriched uranium that provide fuel for nuclear power plants. Iran's atomic energy agency's website said the first domestically made rod had already been inserted into the core of Tehran's research nuclear reactor. It's unclear if the rod contained pellets or was inserted empty as part of a test. The West fears Iran's uranium enrichment program is geared toward making atomic weapons - a charge Tehran denies. 'Unjustifiable' Also Sunday, Iran dismissed Washington's move to impose new sanctions on financial institutions dealing with its central bank over the disputed nuclear program, the Students news agency reported. President Barack Obama signed the bill, approved by Congress last week, which aims to reduce Tehran's oil revenues but gives the U.S. president powers to waive penalties as required. The head of Iran's Chamber of Commerce, Mohammad Nahavandian, rejected the move as "unjustifiable," saying such sanctions would have reciprocal consequences. "The Iranian nation and those involved in trade and economic activities will find other alternatives," said Nahavandian. Story: U.S. steps up sanctions as Iran floats nuclear talks Washington and the European Union have already pushed four rounds of sanctions through the United Nations over Iran's nuclear program and imposed unilateral measures that have deterred Western investment in Iran's oil sector, making it harder to move money in and out of the country. Imposing sanctions on the central bank would tighten that screw and make it more difficult for Iran to receive payments for exports - particularly oil, a vital source of hard currency for the world's fifth-biggest crude exporter. Iranian officials insist that foreign sanctions have had no impact on the country's economy. "The sanctions have raised the cost of trade and economic transactions but it has not managed to change Iran's political behavior," Nahavandian said. Mounting pressure So far, Iran's leaders have shown no sign of changing the country's nuclear course despite mounting international pressure to force it to stop. U.S. financial institutions are already generally prohibited from doing business with any bank in Iran, including the central bank, so the new measure by Washington would have to be carried out with international agreement. Nahavandian said European countries should not miss the investment opportunity in an emerging market like Iran. "Considering the economic crisis in Europe, the European companies are after finding new markets ... political disputes should not have an impact on trade relations," he said. Senior U.S. officials said Washington was engaging with its foreign partners to ensure the sanctions can work without harming global energy markets and stressed the U.S. strategy for engaging with Iran was unchanged by the bill. Meanwhile, Iran's navy said it has test-fired a medium-range surface-to-air missile during a drill Sunday in international waters near the strategic Strait of Hormuz - the passageway for one-sixth of the world's oil supply. State TV said the missile is designed to evade radars and was developed by Iranian scientists. The report didn't provide further details or say when the missile was tested. The exercise covers a 1,250-mile stretch of water beyond the Strait of Hormuz, including parts of the Indian Ocean and the Gulf of Aden. The drill could bring Iranian ships into proximity with U.S. Navy vessels that operate in the same area. The Associated Press and Reuters contributed to this report. More from Oil & energy