The Finance Ministry is closely watching the economic costs of oil imports from other alternative markets like Iraq and Saudi Arabia, following the United States’ withdrawal earlier this month of the waiver granted last year to some countries by the US on its Iran sanctions.

Following the withdrawal of the US waiver, India has stopped contracting oil shipments from Iran this weekend, an official source said here on Wednesday.

Petroleum Minister Dharmenra Pradhan last month had said that government has put in place a robust plan for the adequate supply of crude oil to Indian refineries.

There will be additional supplies from other major oil producing countries and Indian refineries are fully prepared to meet the national demand for petrol, diesel and other petroleum products, he said.

With 80 per cent of India’s requirements being met through imports, higher-priced oil from non-Iranian sources can make a big dent in the country’s current account deficit and forex reserves.

Oil imports from Iran in the past fiscal ended March amounted to about $9 billion, as per industry figures.

Official sources here said that getting oil from alternative sources would have financial implications and lead to further pressure when crude touches $75-80 per barrel in the near-term, putting pressure on India’s import bill.

Iran used to offer India a longer credit period of 60 days compared to other crude suppliers, while the cargo insurance was free, the sources said.

Imports from Iraq, UAE and Saudi Arabia will now be on the higher side, without some of the benefits that Iran was giving, they added.

Iran’s eight biggest oil buyers – China, India, Japan, South Korea, Italy, Greece, Turkey and Taiwan – had received the US waivers last November, which had allowed them to continue importing limited volumes of Iranian crude.

Though India has not yet officially made known its position on future Iranian crude imports, imports from Iran were down 57 per cent in April on a year-on-year basis, according to industry sources. The decline was 31.5 per cent on the previous month’s imports.

India is scheduled to receive two crude carriers carrying 4 million barrels of Iranian oil this month. The two deliveries were loaded in April, prior to the end of the waiver that came into effect on May 2.

India has been Iran’s second largest customer of oil, after China.