India has cut Iranian oil imports by almost one-fifth since December, the sharpest cut among Asian buyers, in a move that should increase its chances of winning a new US waiver next month on sanctions targeting oil trade with Iran.

Sanctions imposed by the US and Europe to force a halt to a controversial nuclear program that Tehran says is for peaceful purposes saw Iran's oil exports more than halve last year, costing it $5 billion a month in lost revenue.

The sanctions have forced refiners in India, Iran's second-largest oil buyer, to reduce imports because national insurer the General Insurance Corp. of India has said that cover and losses on processing the crude would not be payable by European reinsurers.

Local insurers rely on reinsurers, who are mostly based in Europe and the US, to share the financial burden in case of claims on equipment worth billions of dollars.

The US in June will review the 180-day exceptions granted to Asian importers that make continuous reductions in oil purchases from Iran. Waivers allow Iranian imports without the risk of being cut off from the US financial system.

Refiners want to continue using the Iranian crude many of their plants are configured to process, as changes will need lengthy testing of new grades or cause an alteration in output.

"We are hopeful that India will get a waiver because of this forced cut in imports," said an Indian government source.

Reuters