If Iran does indeed go through with this, the part of the oil field which the consortium of Indian state-run entities get will be much smaller.

After India said it planned to order less Iranian crude oil, Iran has threatened to let Russian companies enter the race for developing the Farzad B gas field.

The Times of India reported that if Iran does indeed go through with this, the part of the oil field which the consortium of Indian state-run entities get will be much smaller.

Reports from Vienna quoted Iranian oil minister Bijan Zanganeh as saying that he expected Russian firms to develop a substantial portion of the oil field if the Indian consortium failed to come up with a satisfactory offer.

India's plans to order about a quarter less Iranian crude oil than it bought last year followed its threat to order state refiners — Hindustan Petroleum, Bharat Petroleum, Mangalore Refinery and Petrochemicals Ltd, and Indian Oil Corp — to reduce purchases from Iran if an Indian consortium is not awarded the rights to develop Iran's huge Farzad B natural gas field, reported Reuters.

The volume cuts would put India's imports of Iranian crude for this fiscal year at 3,70,000 barrels per day (bpd), according to the sources with knowledge of the planned deals.

India is Iran's top oil client after China, and last year imported about 5,10,000 bpd of crude from the country, according to shipping data in Thomson Reuters Eikon.

The reduced 2017/2018 imports include 1,99,000 bpd by state refiners, a decline of about a third from last year, the sources said. Private refiners Essar and HPCL-Mittal Energy Ltd (HMEL) have renewed last year's term contracts to buy 1,20,000 bpd and 20,000 bpd, respectively, they said.

Most of the state refiners did not respond to queries on the matter, while Essar Oil, MRPL and HMEL declined comment.

India's oil ministry also said it had no immediate comment.

Analysts said apart from the gas-field row, India is also taking advantage of a narrow price spread between European oil benchmark Brent and Middle East price-setter Dubai crude, which makes it attractive to bring more oil from Europe into Asia.

With inputs from Reuters