"If Iran decides to stop supply of crude oil to India, the energy requirement of New Delhi would not be hampered, " said Mani Shankar Aiyar, Indian Petroleum and Natural Gas minister. Aiyar said he was keeping a close watch on the situation.

"There is enough crude oil available in the market," a senior Oil Ministry official said.

Relations between the two countries, which are traditional allies, have become strained after India voted on Saturday to refer Iran to the U.N. Security Council for allegedly violating its nuclear-program obligations.

Iran warned Tuesday it "will revise ... relations, and these countries (that voted against Teheran at the IAEA) will suffer."

On Wednesday, India's Hindu newspaper reported that Iranian officials had told their Indian counterparts that a 25-year, $21 billion liquefied natural gas export deal between India and Iran, expected to begin in 2009, would be scrapped.

In a communication to the Prime Minister's Office on Sept. 24, India's permanent representative to Vienna, Sheelkant Sharma, had written that his Iranian counterpart had told him the LNG deal was off, Hindu reported.

An Indian Foreign Ministry statement, however, said New Delhi had not heard anything from Tehran.

"We have been given no indication in these interactions of Iran's intentions to review its long-standing and extensive cooperation, with India which is of benefit to and in the interest of both countries," it said.

Separately, the BBC quoted Ali Agha Mohammadi, secretary of Iran's Supreme National Security Council, as saying Iran had no plans to withdraw from the deal.

"We don't want to review our current relations with India and their vote against Iran doesn't affect the gas project," he said.

Nonetheless, the news report made India nervous.

Senior ministers, including Defense Minister Pranab Mukherjee, denied the deal had been scrapped.

"We hope that India's decision at IAEA will not affect the LNG deal," Mukherjee said.

Foreign Office spokesman Navtej Sarna said Foreign Secretary Shayam Saran had on Tuesday explained the background of India's decision at the IAEA during a meeting with Iranian Ambassador S.Z. Yaghoubi.

Reacting to India's decision to vote against it, an official at the Iran embassy said: "We are not as angry as we are hurt. We are shocked and completely surprised."

"India is our friend. We did not expect India to do so; I believe that friends should not be judged by a single action. Iran enjoys friendly relations with India. Of course, we have complaints about their behavior, " Iran's National Security Advisor Ali Larijani said.

Each side needs the other.

Indian firms can win projects in Iran without competition from U.S. oil majors and India is an attractive market for Iranian gas, Indian oil analysts said. India, Asia's third-largest oil consumer, has been banking on Iran to meet its oil requirements. It has also shown interest in investing in the Iranian oil sector.

Uncertainty is also looming over the fate of $7 billion Iran-Pakistan-India gas pipeline after the Indian vote.

"We are worried about the implementation of these projects, which are vital for our energy security, " an Indian Petroleum Ministry official.

Saran, however, said progress on the project depended on its economic viability.

India imports about 100,000-150,000 bpd. Its total import of oil is about 1.9 million-2.0 million bpd.

The leaders of India's four Communist parties, on whose support the United Progressive Alliance government survives, met Prime Minister Manmohan Singh to protest against the government's decision at the IAEA. Singh failed to persuade them of the rationale of his government's decision, however.

"Our differences with the government on this issue persists," said D. Raja, secretary of the Communist Party of India.

All rights reserved. � 2005 United Press International. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by United Press International.. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of United Press International.

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