IOC was the first customer to begin loading Iraqi crude last week, after Baghdad stopped exports because of a row over pricing of its barrels in December.

India later said it had used diplomatic channels to avoid paying a surcharge, that Iraq was demanding for its oil over the price approved by the United Nations. India currently buys crude from Iraq under the UN-monitored oil-for-food humanitarian programme, but recently also agreed a wheat-for-oil barter arrangement with Baghdad.

Details of the wheat-oil deal, which must be approved by the United Nations' sanctions committee, have been sketchy. Indian oil industry officials, earlier said that Iraq was likely to supply one million tonne of crude, over and above the 1.5 million tonne contracted for between April this year and March 2001.(Reuters) 2001(Reuters)"We are expecting more crude under the oil-for-food plan and we don't want to block our tankers or tankage by taking similar crudes from the market," the industry official said.

He declined to say what sort of extra volumes India might take of Iraq's Basrah Light grade.Crude traders in Asia said Indian spot crude purchases appeared to be on a slowdown. IOC awarded just one 500,000 barrel cargo of Dubai crude from two buy tenders for February.

The company also cancelled two buy tenders in the last two weeks, one for the February to April period and the other for January to March.

Its January spot imports were equally weak. In three spot tenders, IOC awarded only 900,000 barrels of Egyptian Gulf of Suez and a single very large crude carrier (VLCC) of Nigerian Escravos.

Recently IOC has bought one VLCC each of Nigerian Bonny Light and Escravos per month in a December-February and a November-January semi-term tender. In January and February this year, IOC bought some six VLCCs of Bonny Light, Escravos and Angolan Palanca crude and up to 900,000 barrels of Malaysian Miri through multiple tenders.