Amid reports claiming America has threatened India with sanctions if it does not reduce its Iranian oil imports by June end, US officials on Friday said Washington and New Delhi are having 'productive conversations' on the issue and termed the report as 'highly speculative'.

"Recent headlines on India and Iran have been highly speculative," a US Government official said, referring to the reports appearing in a section of American and Indian media.

The report quoted Obama administration officials as saying that India has failed to reduce its purchases of Iranian oil, and if it doesn't do so, President Barack Obama may be forced to impose sanctions on New Delhi.

"No decisions have been made and we continue to have productive conversations with India on this important issue, both in New Delhi and in Washington," the official said.

"We welcome statements from Indian officials that India is seeking to diversify its crude oil sourcing and encourage this positive trend," the official said.

In response to a query, sources in the Indian embassy indicated that US officials have reached out to them to convey that the news reports were 'not an accurate reflection' of the US policy.

They remain focused on consultation and discussions with the Government of India on this issue, sources said.

Under the Iran sanctions legislation, a country is subject to American sanctions if it doesn't make a 'significant' reduction in its Iranian crude oil purchases during the first half of this year.

India imports 12 per cent of its oil from Iran, which is No 2 producer in the Organisation of Petroleum Exporting Countries.

A State Department spokesman welcomed statements from Indian officials that India is seeking to diversify its crude oil sourcing.

"As Secretary (of State, Hillary) Clinton noted in her recent hearings on Capitol Hill, we view India's efforts to reduce its dependence on Iranian oil positively. We welcome this trend and encourage it to continue," the spokesman said.

Figures available from open source documents reflects that India's purchase of oil from Iran has come down in last few years.

India in 2008-09 purchased 21.8 million tonnes of oil from Iran, which dropped to 21 million in 2009-10, and 18.5 million tonnes in 2010-11.

Even percentage wise too, there has been considerable drop in India's reliance on Iranian oil from 16.5 per cent in 2008-09 to 13 per cent in 2009-10 and 11 per cent in 2010-11. Latest figures estimate that it has further dropped to 10 per cent.

As India is increasingly looking at other sources of energy, including the recent talks it had with Saudi Arabia, India’s purchase of oil from Iran is expected to drop further.

However, US officials said there is still work to be done in this regard, talks for which are currently going on.

"As Secretary Clinton also noted, there is still work to be done. We continue to have very candid conversations with India about our seriousness in enforcing sanctions revenues that fuel nuclear activity by the Iranian regime," the spokesman said adding that those conversations are ongoing in both Delhi and Washington.

"India continues to be a valued partner in our common objective of preventing Iran from acquiring a nuclear weapon," the spokesman added.