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State-owned Indian Oil Corporation (IOC) has sold two 380-centistoke(cst) fuel oil cargoes for loading next month, Reuters reports.

The parcels, both 30,000 tonnes in size, were reportedly purchased by oil major BP and commodity trading firm Trafigura.

BP's cargo is slated to load from Chennai on March 4-7, whilst Trafigura's parcel is scheduled for lifting on March 20-23.

Both fuel oil cargoes are said to have been purchased at a discount of between $10.00 and $10.50 per tonne to the IOC formula, on a free-on-board (FOB) basis, according to sources.

Despite a recent decline in demand in China following the buying rush ahead of a fuel tax increase on January 1st, fuel oil demand has remained strong. A decrease in supplies from the Middle East and South Korea together with a drop in arbitrage inflows from Europe to Asia have been supporting the market. As a result, the discounts on IOC's latest cargo sales are lower than in previous months.

In January, IOC reportedly sold two 30,000-tonne cargoes of 380-cst for lifting in February to oil major BP. The parcels were purchased at a discount of $12 per tonne to the IOC formula, according to traders.

The previous month, Emirates National Oil Co (ENOC) had achieved a larger discount - at between $16.50 and $17.50 per tonne to the IOC formula - when it purchased two 30,000-tonne cargoes of 380-cst for January loading from IOC.

IOC operates refineries in Assam, Gujarat, West Bengal, Uttar Pradesh, Madras and Bihar and is the leading provider of fuel oil for the bunker market, supplying both marine fuel and lubricants to customers in all major Indian ports.