The recent sanctions imposed on Iran by the United States has in turn put pressure on India to diversify to other oil producing nations. Until now Iran was India’s second largest supplier of oil, meeting 12% of the country’s needs. This position has now been taken over by Iraq.
The reason for the movement away from Iran is due to fears that the newly imposed US sanctions will make the payments for supplies from Iran even more difficult. A fear has arisen that the third-party payment system in place at this time will collapse due to the sanctions.
(Source: The Hindu Business Line)