Besides a dispute over $5 billion of unpaid bills crude oil supply to India from Iran is observed to rise by 14% during the month of June, where Iran's oil deliveries to the Asian nation rose to 400,000 barrels a day in June from 350,000 barrels a day in May, said the source. Prior to dispute Iran supplied about 400,000 barrels a day in 2009-2010.

Earlier, a former Indian oil Secretary had marked Iran as country’s second biggest supplier after Saudi Arabia and notified that India imports approximately 21 million metric tons of crude from Iran, annually, that totals oil trade between India and Iran to $9.5 billion a year. “Supplies are maintained based on an interim arrangement, Mangalore Refinery, which buys about 7 million tons a year of crude from Iran”, stated the 2010 annual report.

Iran has warned its customers in India for clearance of its bills otherwise threatened to obstruct shipments next month. The purchasers of Iranian crude include Essar Oil Ltd. (ESOIL), Hindustan Petroleum Corp. and Indian Oil Corp. where Mangalore Refinery & Petrochemicals Ltd. (MRPL) credits to be its biggest Indian buyer.

On the other hand, a Secretary in the department of economic affairs in India’s Ministry of Finance, R. Gopalan, has refused to make any comments on the dispute.