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India's April Iran oil imports drop as buying spree cools

* Imports fall as India, other Iran clients ease off buying surge

Essar Oil, MRPL were only two Indian importers of Iran oil in April

* Iran 8th largest crude supplier to India in April, down from 4th

By Nidhi Verma

NEW DELHI, May 14 (Reuters) - India cut its monthly Iranian crude imports by 42 percent in April from March, in a further sign that Asian oil buyers are reining in an early-2014 spree that took Tehran's exports well past levels allowed under an interim deal with the West.

The six-month deal, implemented on Jan. 20, allowed Iran access to $4.2 billion in frozen oil funds and crude exports of about 1 million barrels per day (bpd) in exchange for Tehran taking steps to curb its nuclear program, which Western nations fear may be aimed at building a bomb.

Six world powers and Iran launch three-day talks in Vienna on Wednesday, aiming to find a permanent resolution to the decade-old dispute over Tehran's nuclear work despite skepticism a final deal is possible.

India, Iran's top client after China, shipped in about 225,000 bpd of the republic's oil in April, the lowest in four months, according to tanker arrival data obtained from trade sources and compiled by Thomson Reuters Oil Analytics.

India's oil imports from Iran in April, the first month of new annual contracts with Tehran, nearly doubled from a year ago, the data showed. The imports in the first four months of 2014 surged 49 percent versus last year, the data also showed, with the biggest increases coming in the first quarter.

India and other top buyers of Iranian oil - China, Japan and South Korea - let their purchases rise sharply in the first three months of the year, after the temporary deal easing some sanctions on Tehran went into effect in January.

In March, Iran's top four clients - China, India, Japan and South Korea - imported 1.15 million bpd of Iranian crude and condensate, down from February's 1.37 million bpd, the highest aggregate imports in more than two years.

That surge in the first quarter brought a private warning from the United States for India to hold its Iran oil buys to end-2013 levels of about 195,000 bpd, but there have been few signs of pressure on other buyers.

U.S. officials have said they expect Iran's average daily exports to drop to 1 million bpd for the six months of the temporary deal by the time it expires on July 20.

Tanker loading schedules that were seen by Reuters in April indicated that the imports by Iran's top clients should fall again in May.

Essar Oil and Mangalore Refinery and Petrochemicals Ltd were the only two Indian refiners that purchased oil from Iran in April.

State-run MRPL and Indian Oil Corp plan to keep their annual purchases from Iran at last year's levels of about 80,000 bpd and 25,000 bpd, officials at the companies said.

Iran's share of Indian crude imports dropped to about 5.4 percent in April, the tanker arrival data showed. In comparison, Iran accounted for about 16.4 percent of India's oil imports in 2008/09 and 5.7 percent in 2013/14.

Tehran was the eighth largest crude supplier to India in April, down from fourth in March and recovering from the 11th position a year ago, the tanker data showed.

Overall, India imported about 4.15 million bpd in April, up about 4.4 percent from a year ago, the data showed.

(Editing by Tom Hogue)