The European Union fell in line quickly with the US-led Iran sanctions, but the truth is the sanctions won’t bite much without China and India as they buy more than half of Iran's daily crude exports.

New York: Tokyo pledged on Friday to keep cutting purchases of Iranian crude, but Japan's foreign minister Koichiro Gemba urged the US earlier this week to get the two other big Asian economies, China and India, to join a ban of oil imports from Iran.

"Without cooperation within the world community, there's no way to carry out effective sanctions," Gemba told reporters, while emphasising that the US should try to talk more with India and China as they are the biggest buyers of Iranian crude.

President Barack Obama, who signed a new sanctions law on New Year's Eve aimed at starving Tehran of critical oil revenues, has dispatched a flock of diplomats to Asia to tighten an international noose around Iran. But except for Japan, the US hasn't so far received any firm commitments from other major Asian countries in support of a ban on imports of Iranian crude oil.

The European Union fell in line quickly with the US-led Iran sanctions, but the truth is the sanctions won’t bite much without China and India as they buy more than half of Iran's daily crude exports.

India relies on Iran for about 12 percent of its oil imports or 3,50,000-4,00,000 barrels per day (bpd) and is Iran’s second-biggest oil client after China. India has rejected US pressure and made it as plain as daylight that it will continue to trade with Tehran. Foreign secretary Ranjan Mathai said this week that India wouldn't abide by US sanctions.

"We have accepted sanctions which are made by the United Nations. Other sanctions do not apply to individual countries," Mathai said. "We continue to buy oil from Iran."

In the face of tougher US sanctions, India and Iran have been working to set up new payment channels. An Indian delegation has been in Tehran this week discussing options for payment and Reuters reported that India and Iran have agreed to settle some of their $12 billion annual oil trade in rupees.

"The Central Bank of Iran will open an account with an Indian bank for receiving payment and settling its import," a source told Reuters, adding the new system will start "soon".

Other sources also told the news agency that Iran could open an account with India's UCO Bank as it doesn’t have any interests in the US. Washington says it will punish banks that deal with Iran's central bank, the main clearing house for oil payments.

In addition to rupee payments, Indian refiners will continue to make payments through the current mechanism using Halkbank, "as long as it continues."

Nor has China, Iran's biggest crude customer, given any indication it is prepared to assist the US in isolating Iran. China, which has long rejected unilateral sanctions against Iran as overstepping the mark, gave no hint of giving ground last week when US treasury secretary Timothy Geithner visited Beijing.

"These issues can't be resolved through sanctions," said Chinese vice foreign minister Cui Tiankai adding that negotiations were the right approach to the problem.

According to media reports, South Korea also intends to seek a waiver from the US sanctions, and in public comments has not shown any clear commitment to cutting imports.

If pushed too far, Iran has threatened to close the Strait of Hormuz, a vital shipping lane which connects the Persian Gulf with the Arabian Sea, to poke the US in the eye. Iranian sabre-rattling about shutting down the Strait of Hormuz caused the price of oil to run up to $103 a barrel in earlier this month.