Jun 01 2022
Effective June 1, Platts, part of S&P Global Commodity Insights, no longer reflects Russian-origin product in its open origin European diesel and gasoil cargo assessments.
At the same time, Platts has launched a new assessment for ULSD cargoes CIF NWE reflecting all origins.
The decision by Platts follows a review into the continued inclusion of Russian-origin material in its European diesel and gasoil assessments, announced in a subscriber note published April 14: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/041422-s-p-global-seeks-feedback-on-russian-product-in-platts-european-diesel-gasoil-assessments
Feedback gathered from the market, as well as observed market activity in recent weeks, had shown a significant move away from Russian-origin material in the spot market.
Platts had observed that many market participants were now restricting material from Russia, in part or entirely, in their spot diesel and gasoil trading activity.
Platts assessments reflect the value at which a standard, repeatable transaction for merchantable material takes place, or could take place, in the open spot market at arms length.
Although Russian product continues to flow to the European market, Platts understands that it is not trading on the same basis as product from other origins in the spot market, and that there is a difference in value between Russian and non-Russian product.
As a result, with effect from June 1, the Platts assessments listed below exclude Russian-origin product.
ASSESSMENT DETAILS: From June 1, the Platts European diesel and gasoil cargo assessments consist of:
*From June 1, all open origin European diesel and gasoil cargo assessments exclude Russia-origin product
**basis CIF Le Havre
The calculations for the associated freight netback and freight netforward European gasoil and diesel assessments remain unchanged as of June 1. However, Platts continues to monitor prevailing trade flows and review the plausible load ports in these calculations, including the continued inclusion of Russian load ports.
NEW CIF NWE ULSD CARGO ASSESSMENT: Platts understands that there continues to be a flow of Russian product into Europe, and market feedback has suggested a continued need for transparency in this market. As such, Platts has launched a new assessment for ULSD cargoes CIF NWE (all origins), which reflects material from all origins, including Russia. Other parameters and specifications of the new assessment are the same as the existing ULSD 10 ppm CIF NWE cargo assessment (AAVBG00). Platts is publishing the outright value of this new assessment in $/mt, as well as the spread reflecting the value of cargoes from all origins versus restricted origin cargoes.
SEEKING MORE FEEDBACK ON ARA BARGES: Platts understands there are logistical differences between the Amsterdam-Rotterdam-Antwerp barge market and European cargo markets, particularly around the demonstration of origin of product. As such, Platts has invited further feedback on whether Russian-origin material should also be excluded from its European diesel and gasoil barge assessments, and how origin of product would be demonstrated in these markets.
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