CORRECTED: India's 2016 Iran oil imports hit record high - trade

(Corrects 4th paragraph in story from Jan 13 to say that India's Dec imports from Iran more than doubled from a year ago)

By Nidhi Verma

NEW DELHI (Reuters) - India's annual oil imports from Iran surged to a record high in 2016 as some refiners resumed purchases after the lifting of sanctions against Tehran, according to ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts.

The sharp increase propelled Iran into fourth place among India's suppliers in 2016, up from seventh position in 2015. It used to be India's second-biggest supplier before sanctions.

For the year, the world's third biggest oil consumer bought about 473,000 barrels per day (bpd) of oil from Iran to feed expanding refining capacity, up from 208,300 bpd in 2015, the data showed.

In December, imports from Iran more than doubled from a year earlier to about 546,600 bpd.

In 2015 refiners had slowed purchases due to sanctions which choked payment routes, insurance and halved Iran's exports.

Indian refiners Reliance Industries, Hindustan Petroleum, Bharat Petroleum and HPCL-Mittal Energy Ltd (HMEL) last year resumed imports from Tehran, attracted by the discount offered by Iran.

"In most of 2016 there was a fight among Gulf producers to increase their market share and lifting of sanctions against Iran has intensified that fight," said Ehsan ul Haq, senior analyst at London-based consultancy KBC Energy Economics.

In April-December, the first nine months of this fiscal year, Iranian supplies to India averaged a record 530,300 bpd, up from about 400,000 bpd before sanctions tightened against Tehran.

India's 2016 Iranian oil imports were the highest in at least six years, according to the Reuters data.

Government data going back over a longer period shows the average was the highest since the 2001-02 fiscal year.

Overall, India imported 4.3 million bpd oil in 2016, up 7.4 percent from the previous year.

MIDDLE EAST JUMP

Rising imports from Iran and Iraq lifted the Middle Eastern share in India's crude diet to 64 percent in 2016, reversing a declines in recent years, partly due to rising prices for Atlantic Basin oil tied to Brent.

The average premium for Brent jumped against Dubai crude to more than $3 a barrel in 2016 from around $1.80 in 2015.

"In 2016 Iran ramped up its output to regain market share while Iraq segregated its production into Basra Light and Heavy to attract customers. Basra Heavy was sold at a discount, making it more attractive than rival grades," said Haq.

Iran's share of Indian oil imports surged to 11 percent in 2016 from 5 percent in 2015.

Saudi Arabia remained the top supplier to India last year followed by Iraq and Venezuela.

Imports from Latin America declined for a second year, with its share of imports shrinking to about 16 percent from 18 percent, while Africa's share fell to about 15 percent from a fifth.

"Low oil prices brought down production in Latin America while Nigerian barrels were impacted by violence in the Niger Delta. Also falling U.S. oil output impacted trade flows, with some Latin American and African oil finding a place in the U.S.," Haq said.

(Reporting by Nidhi Verma; Editing by Sonali Paul)