SINGAPORE, Aug 10 (Reuters) State-run Indian Oil Corp. (IOC) has bought 1 million barrels of sour R

SINGAPORE, Aug 10 (Reuters) State-run Indian Oil Corp. (IOC) has bought 1 million barrels of sour Ratawi crude in its tender for heavy grades for October, traders said on Friday.

IOC also bought a Very Large Crude Carrier (VLCC) of Nigerian crude and 600,000 barrels of Malaysian Labuan in a parallel tender for end-September or October-loading sweet crude, traders said, bringing the total bought through tenders this week to around 3.6 million barrels.

India's largest state oil refiner bought Neutral Zone Ratawi crude from U.S. major Chevron, traders said.

The cargo traded at around a discount of $5.00 a barrel to Dubai quotes, a trader said, which is $1.80 more costly than the $6.80 discount paid by IOC in its last purchase of the crude, for August loading.

Heavy sour, fuel-oil rich, crude has strengthened over the past two months on the back of stronger fuel oil prices and as arbitrage opportunities have narrowed.

This is the fifth time in six tenders for heavy grades that IOC has picked Ratawi crude.

IOC started buying heavier, cheaper crude after it completed the installation of a coker unit at its 240,000 barrels per day (bpd) Panipat refinery, which doubled capacity last year.

The refiner bought a cargo each of Nigeria's Bonny Light and Escravos grades from Japanese trader Mitsui, and Labuan crude from Malaysia's state-owned Petronas, traders said.

Bonny Light traded at around a $2.80 a barrel premium to dated Brent, heavier Escravos at a premium of around a $2.30-2.40 a barrel, a trader said.

Labuan was sold at a $7.00 premium to Dated Brent, the trader added.

This is the second week in a row that IOC has bought Malaysian crude via tender.

IOC already bought 4.6 million barrels of October-loading sweet crude last week, through two tenders.

IOC, which has about 10 refineries across India for a total capacity of 1.204 million bpd, also tenders several times a month to buy mainly sweet West African grades.

REUTERS KR BD1622