Iran has sent a fresh warning that it may stop oil exports to India from Aug. 1 if $5 billion arrears aren't paid, as a dispute tied to international sanctions appears close to escalation.

"It is highly likely that if the problem with reception of the money isn't resolved, Iran won't export oil to India in August," the Fars news agency quoted an unnamed Iranian oil official as saying Monday.

Iran and India have been at loggerheads since December after a clearing system for the Islamic Republic's oil sales to the Asian nation was discontinued due to international banking sanctions.

Iran has continued to deliver oil to India --its second largest crude buyer--pending resolution of the problem. But the Islamic Republic hasn't been able to access $5 billion paid into a joint account.

Foreign Ministry spokesman Ramin Mehmanparast Tuesday echoed the oil official's warning.

"The oil transaction should be carried in accordance with trading conditions and absence of necessary conditions for payment will have negative effects on the trade," the Mehr news agency quoted Mehmanparast as saying.

The remarks suggest Iran may now be losing patience after having downplayed an earlier warning that it could interrupt supply to India .

Sanctions have targeted investments in Iran 's oil and gas sector and bank transactions. But an Iranian decision to interrupt oil supply to India would be the most tangible suggestion that the measures are also hurting sales of crude--the country's largest source of revenue.

Iran is the second-largest crude supplier to India --after Saudi Arabia --accounting for about 13%-14% of the country's oil imports.

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