India may slash import of crude oil from Iran by as much as 27 per cent this fiscal because US and European sanctions have made it difficult to ship oil from the Persian Gulf nation.
India may, in the financial year ending March 31, import just about 13 million tonne of crude oil from Iran, down from 18.1 million tonne shipped in the 2011-12 fiscal, official sources said.
US and EU have shut down the use of their financial systems for Iranian crude trade, and Washington recently imposed more treasury sanctions on trade with Iran - making imports from the Islamic nation even more difficult - in the hope of starving Tehran of cash that would force it to give up its nuclear programme.
Iran says its nuclear programme is for peaceful purposes.
While India can't deposit dollars or euros in any foreign bank for importing crude from Iran because of the sanctions, insurance companies are refusing to cover refineries that use oil from the Persian Gulf nation.
Sources said that in the current fiscal Iran has slipped four places to become India's seventh-largest crude oil supplier.
Iran, which was India's second biggest supplier of crude oil after Saudi Arabia in 2010-11, supplied 9.7 million tonne during the April-December
The supplies from Iran were behind Saudi Arabia's 24.8 million tonne, Iraq's 17.2 million tonne, Venezuela's 15.1 million tonne, Kuwait's 13.2 million tonne and UAE's 11.4 million tonne.
India had last fiscal (2011-12) relegated Iran to the third spot with 18.1 million tonne of imports. These were behind 32.5 million tonne from Saudi Arabia and 24.1 million tonne from Iraq.
Sources said Iran had in 2009-10 supplied 21.2 million tonne, which came down to 18.5 million tonne in 2010-11 and to 18.1 million tonne in the year after.
It may end the fiscal with import of just about 13 million tonne in current fiscal, they said.
During current fiscal, Iranian supplies made up for 7.2 per cent of the India's oil imports, down from 10.5 per cent in the previous fiscal (2011-12).
India has been since last year cutting import of crude oil from Iran after US and European nations sanctions made shipments and payments difficult.
India, which relies on import for 79 per cent of its oil needs, bought a total of 134 million tonne crude in April to December this fiscal. Last year, it had imported 171.7 million tonne of crude oil, up from 163.4 million tonne in 2010-11 and 159.2 million tonne of 2009-10.