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India's Essar Oil has offered 120,000 metric tonnes of fuel oil for loading in the second half of June, Reuters reports.

The integrated oil company is understood to be offering two parcels of 180-centistoke fuel oil of 3.5 percent sulphur and 0.991 density. The parcels are to be loaded from Vadinar on June 15-19 and June 23-30, where the company also operates its US$2.14 billion Esssar Refinery [pictured].

Essar recently sold a 40,000 tonne end of May loading cargo to an oil major at a premium of $7 to Middle East spot quotes. This latest offer comes amid surging fuel oil prices and a decrease in demand from China.

The world's second largest oil consumer has seen monthly fuel oil imports fall compared to 2007 as high import costs have stifled demand from local power plants and refineries. Chinese imports of fuel oil are expected to drop to around 1.9 million tonnes in May, down approximately 10 percent from the previous month.

Leading market experts have said that there is currently sufficient fuel oil in the East Asia market and any additional product purchased for next month would probably be in anticipation of lower arbitrage inflows from the West. Approximetly 1.8 million tonnes of arbitrage Western fuel oil set is to arrive in June, according to Reuters.

The oil terminal at Vadinar is operated by Vadinar Oil Terminal Ltd. (VOTL), a wholly owned subsidiary of Essar Shipping & Logistics Ltd. The 32 million tonne terminal facility began operating in September 2007.

Essar's refinery in Vadinar is able to produce 10.5 million tonners per annum and is ideally located on India's West Coast in close proximity to the crude rich Gulf States. Vadinar is an all-weather deep-draft natural port and over 60 percent of India's crude imports land in and around this region.