Privately-owned Essar was Iran's top Indian client in April to October, temporarily replacing state-run Mangalore Refinery and Petrochemicals Ltd, according to data available to Reuters, taking more than its term deal's average quantities.
India received a six-month waiver in June from the United States from its sanctions, which target Iran's nuclear programme and would cut off countries failing to reduce Iranian oil imports from its financial system. Renewal of the waiver requires further cuts.
The sanctions aim to choke Iran's oil revenue, the lifeline of its economy, and to force the OPEC member to curb its nuclear programme, which the West believes is meant for making an atom bomb. Iran denies this claim.
In November, Essar imported about 265,000 tonnes or about 64,500 barrels per day (bpd) crude from Iran, a decline of about 55 percent from the previous month and about a third of its imports a year ago, the source said.
In October, the refiner imported 144,800 bpd and about 180,800 bpd in November last year, the source, who requested anonymity because of the sensitivity of the issue, added.
"Essar will continue to reduce purchases from Iran as it wants to bring down imports from Iran to about 85,000 barrels per day in this fiscal year," said the source.
Essar imported about 109,000 bpd from Iran during April-October, according to Reuters data, and has been criticised by state-run refiners for not cooperating with them in India's effort to reduce shipments from the Islamic nation.
Essar has an annual deal with Iran to import about 100,000 bpd oil in this fiscal year ending March 31, 2013 and the planned reduction is in line with a verbal directive from the government to reduce imports by 15 percent.
Essar, which operates a 400,000 bpd refinery at Vadinar in western Gujarat state, has meanwhile significantly raised processing of heavy and ultra-heavy grades, including those from Latin America, to improve refining margins.
The refiner has an annual deal with Colombia's Ecopetrol ECO.CN to import 12 million barrels of Castilla crude oil.
Essar aims to buy 15-20 percent of its oil needs from the domestic market, 35-40 percent from Latin American sources, and 30-40 percent from the Middle East, it said in May.