Washington, Mar 16 (IANS): The United States has threatened to impose sanctions on India if it fails to reduce its purchases of Iranian oil, according to a media report citing unnamed Obama administration officials.

A decision to levy penalties under a new US law restricting payments for Iranian oil could come as early as June 28, Bloomberg news agency said citing "several US officials who spoke on condition of anonymity."

The US law, which targets oil payments made through Iran's central bank, applies to any country that doesn't make a "significant" reduction in its Iranian crude oil purchases during the first half of this year.

"If India fails to cut Iranian imports sufficiently, Obama may be compelled to bar access to the US banking system for any Indian bank processing oil payments through Iran's central bank," the unnamed US officials were quoted as saying.

The new US law targeting Iranian petroleum transactions doesn't specify by what percentage a nation must reduce its Iranian oil imports to qualify for an exemption from sanctions.

But US officials cited by Bloomberg said they are looking for cuts of around 15 percent in volume, though they might consider whether buyers have extracted significant price discounts, thereby depriving Iran of revenue.

The US has offered India help in brokering deals with alternative suppliers including Iraq and Saudi Arabia, which has offered to replace any shortfall, the agency said citing US and Indian officials.

"The White House doesn't want to punish Japan, South Korea or India, critical US partners in trade and security and important regional counterweights to the rise of China," unnamed US officials were quoted as saying.

"Still, the president has limited leeway to grant exemptions under the law, and so far, India hasn't demonstrated reductions," they said.