Iran releases Indian oil tanker detained over pollution concerns

NEW DELHI (Reuters) - Iran has released an Indian crude oil tanker that was detained last month over pollution concerns, an Indian shipping official said on Saturday, ending a dispute between the countries that have historically had strong trade ties.

The tanker, Desh Shanti, carrying 140,000 tonnes of Iraqi crude, sailed on Friday night India time, said Captain Sunil Thapar, the director of bulk carriers and tankers at state-run Shipping Corp of India (SCI).

"She sailed last night at 2354 hours after being finally released from detention," Capt Thapar told Reuters, declining to say if any pollution damage claims were made.

The tanker is owned by the SCI and was carrying crude oil for Hindustan Petroleum Corp.

Iraq was India's biggest supplier of crude in June, pipping Saudi Arabia for the top slot with exports of 606,000 barrels per day. Exports from Iran, which used to be India's second-biggest supplier, have dwindled because of Western sanctions.

India, Asia's third-largest economy, relies on imports for 80 per cent of its crude consumption, and over 60 per cent of its supplies come from Gulf countries.

Tensions between Iran and Iraq have always been high, spilling into outright war during the 1980s, but they are now focused on the battle for market share as Iran struggles with the impact of Western sanctions on its sales.