Iranian crude imports to India are expected to continue to decline this year, as the country secured a fresh six-month waiver from the United States on sanctions against Iran this week, analysts say.
"India has reduced its dependence on crude oil imports from Iran to 13.3 million tonnes, 7.3 per cent of crude oil imports, in 2012-2013 from 18 million tonnes, 10.5 per cent of crude oil imports, the previous year," said Mayur Matani, an oil and gas analyst at ICICI Securities.
"This year also, imports are expected to plunge further to around 11 million tonnes as Mangalore Refinery and Petrochemicals has not imported any Iranian oil so far this fiscal year."
Mangalore Refinery and Petrochemicals, India's largest importer of Iranian crude, stopped importing from Iran, saying that domestic insurance companies were refusing to cover refineries that processed Iranian crude.
The US state department approved exemptions on Wednesday for India and China, along with seven other countries. Those nations have come under pressure to reduce crude imports from Iran to secure the waivers and they were granted "based on additional significant reductions in the volume of their crude oil purchases from Iran or for reducing those purchases to zero and remaining there", according to a statement by John Kerry, the US secretary of state.
The US sanctions are designed to choke off revenues for Iran and curb its nuclear programme. The waivers are reviewed every six months.
"A total of 20 countries and economies have continued to significantly reduce the volume of their crude oil purchases from Iran or have completely eliminated such purchases," Mr Kerry said. "This determination takes place against the backdrop of other recent actions the administration has taken to increase pressure on Iran."
US and European sanctions resulted in Iran's crude exports being cut in half last year.
Iran's crude exports fell to the lowest in decades in May, according to industry sources and tanker-tracking data. Crude shipments dropped to 700,000 barrels per day (bpd) last month, the data from sources showed, about a third of Iran's oil exports before the current round of sanctions. Washington is now seeking to cut shipments to less than 500,000 bpd through tighter sanctions.
India's purchases of Iranian crude over April and May declined by about a quarter compared to the first three months of the year, preliminary data suggest, according to Reuters. India is the second biggest importer of Iran crude after China.
The US under secretary for political affairs, Wendy Sherman, speaking in New Delhi two weeks ago, praised India's reduction of Iranian crude imports.
"I think that India has really made tremendous progress in reducing the level of its importation of Iranian oil. India has long been a leader in non-proliferation," she said.
"They have stood side-by-side with all of us in the international community to say that Iran should not acquire a nuclear weapon," she added. "We greatly appreciate all of the leadership that India has provided, including their enforcement of sanctions."