India is preparing to stop imports of Iranian crude because refineries processing Iranian oil cannot be covered by local insurance companies due to US-backed sanctions, according to media reports.

Before the sanctions took hold in 2012, India was Iran’s third largest buyer of Iranian crude after China and Japan, purchasing about 16 per cent of the Islamic Republic’s total exports.

Managing director of India’s largest crude oil buyer Mangalore Refinery & Petrochemicals, PP Upadhya, told Reuters that all Indian refiners would have to halt Iranian imports if insurance cover is not available.