LONDON - Turkey is struggling to import Iranian oil in July because of Western sanctions on ship insurance, trading and shipping sources told Reuters, leaving Tehran battling to sell oil now stuck in storage tanks in Egypt. Turkey, which relies on Iran for half its crude needs, has already cut imports of Iranian oil by a fifth from average levels of 2011 to win waivers from U.S. sanctions. But volumes will now likely fall much steeper as Turkish main refiner Tupras cannot import Iranian oil on Turkish tankers after European Union sanctions against Tehran stopped the region's firms, which dominate the marine insurance sector, from offering cover on Iranian crude. "Tupras was lifting Iranian crude with its own tankers up until July... This is no longer possible... They are now focusing more on lifting from Libya, Saudi Arabia and Iraq with its tankers," said a Turkey-based shipping source. Turkish Energy Minister Taner Yildiz told reporters on Friday Tupras's crude purchases from Iran were continuing without any problems, but gave no details. Tupras declined to comment. Industry experts say the ship insurance ban has proved to be the hardest hitting in the West's arsenal of sanctions aiming to persuade Iran, which relies on oil for more than half its budget revenues, to abandon its nuclear programme. Iran denies its nuclear programme is aimed at making weapons. The lack of shipping cover has already disrupted flows of Iranian oil to Tehran's major customers in Asia -- China, India, South Korea and Japan -- at a time when the EU has stopped buying its oil altogether. The measures are costing Tehran over $3 billion a month as its crude exports are estimated to have halved to 1.1 million bpd in the past months.