RTRS:Brent steady around $110, Greek debt counters Iran
* EU readies ban on Iran oil imports, central bank sanctions
* Eurozone finance ministers to rule on glacial Greek debt talks
* Asian shares, the euro pause on caution as Greece talks eyed
* Arab League proposes new plan for Syrian transition (Updates prices)
By Manash Goswami
SINGAPORE, Jan 23 (Reuters) - Brent crude futures held steady around $110 on Monday as concerns about European demand countered worries about supply disruptions from the Middle East due to simmering tensions between the West and Iran.
Euro zone finance ministers will on Monday decide what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens. Resolving the issue is key to avoiding a chaotic default that could threaten the entire currency bloc.
European Union governments are also expected to agree on Monday new economic sanctions against Iran over its nuclear programme, including plans to phase in an oil embargo.
Front-month Brent was unchanged at $109.86 a barrel by 0740 GMT, trading in a narrow range. U.S. crude fell 56 cents to $97.77, after sliding as low as $97.40, the lowest since Dec. 21.
"Both of these meetings (on Monday) are going to be crucial in dictating oil prices," said Ben Le Brun, market analyst at OptionsXpress.
"Any indication of a plan getting approved to tackle Greece's debt would support oil. An Iranian oil embargo would also boost prices as demand continues to improve."
The twin factors may help push the U.S. benchmark back above $100 this week, while Brent may rise closer to $115, Le Brun said. U.S. crude settled above the $100 mark for most of last week. It ended at $98.46 on Friday pressured by economic uncertainty ahead of a possible debt deal in Greece.
The European Union's new sanctions follow fresh financial measures signed into law by U.S. President Barack Obama on New Year's Eve, and will mainly target the oil sector, which accounts for some 90 percent of Iranian exports to the EU. Europe is Iran's second-largest oil customer after China.
The EU measures are also expected to include sanctions against the Iranian central bank and a ban on trading in gold with the government, diplomats say.
"Today, markets will be watching headlines from Europe, with EU ministers to decide on a ban on Iranian crude exports," analysts at ANZ said in a report. "Softer demand appears to be outweighing concerns over potentially tighter supplies."
SANCTIONS, DEBT CRISIS
Banning Iranian imports will lead to consumers competing for supplies just as a steady economic revival at the world's biggest oil consumer, the United States, looks set to boost demand.
On the other hand, Asia's top buyers of Iranian oil, China and India, are not likely to jump in to snap up the extra barrels from the Islamic Republic that have no takers as a result of the embargo.
China has scaled back imports in the first two months of this year as the two sides have yet to agree on the 2012 contract terms, while India is struggling to pay for the oil it buys from the Islamic Republic.
"Although China and India will continue to import Iranian crude, it is far from clear they will ramp up imports to fully offset sanctions-related sales losses elsewhere," analysts at JPMorgan said in a report.
"We expect tighter sanctions to make it harder for Iran to sell its oil production, and may lead to some production shut ins."
Weighing on prices against concerns over supply is Greece's debt crisis and a looming default.
The euro zone finance ministers' meeting comes after private creditors said on Sunday they had come to the limits of what losses they could concede in a debt swap with the country.
Without another bailout, Greece will not be able to pay back 14.5 billion euros in maturing bonds in March, triggering a messy default that would hurt the whole euro zone economy and likely depress energy demand.
"Investors are also likely to be encouraged by reports that an agreement with bond holders on a restructuring of Greek debt is close," said Ric Spooner, chief market analyst at CMC Markets, said in a report.
"However, any positive market reaction to this news is likely to be delayed until there is a formal announcement that can be relied on." (Editing by Sugita Katyal)
