Indian refiner Reliance quit selling gasoline and diesel to ran last year after French banks BNP Paribas and Calyon stopped offering credit on the deals, four company and industry sources said on Thursday.

BNP and Calyon, the investment bank arm of Credit Agricole, likely stopped offering Letters of Credit (LCs) - a standard form of payment guarantee in the oil trade - because of political pressure from Western nations that believe Tehran is trying to develop nuclear weapons, one of the sources said.

'None of the banks which have something to do with the United States were willing to open (LCs) because of US pressure,' said a senior Reliance Industries Limited source who declined to be named due to the sensitivity of the business.

Trade sources said Reliance, India's biggest private refiner, had been shipping major supplies of gasoline to Iran and occasionally sold diesel, but stopped those shipments in October last year and had not resumed.

The move by BNP and Calyon, who are major providers of credit for oil traders globally, is a sign that the US-led campaign to isolate Tehran over its nuclear programme is having an impact on its vital fuel imports, a sensitive subject for the Opec member, whose ageing refineries cannot keep up with demand.

It has not stopped shipments from coming in, but forced Iran to seek supplies from further afield. It has bought some 160,000 tonnes of diesel in the Singapore market over the past week, trading sources have told Reuters.

Earlier in the day Hojjatollah Ghanimifard, international affairs director at National Iranian Oil Company, denied any difficulty in securing the fuel it needs, telling Reuters: 'We have no problems with transactions for exports of crude or imports of products.'

He declined to comment if international companies faced
problems obtaining LCs, saying: 'We could find other means aside from letters of credit, whatever buyers or sellers are happy with.'

But US and UN sanctions over Tehran's disputed nuclear programme have targeted Iranian banks, while international
banks have come under pressure not to deal with it.

Swiss-based independent trader Vitol, Iran's biggest supplier of gasoline, decided to end its long-running contract to provide fuel to the country this year after losing money on the deal, an industry source said last month.

An Iranian official was quoted as saying in December that Chinese banks had stopped opening LCs with Iran, although Beijing has resisted moves to penalise Tehran, and recently agreed a major deal to develop its Yadavaran oilfield.-Reuters