Platts amends Northwest European high sulfur fuel oil netback freight basket

Platts, part of S&P Global Commodity Insights, has amended the freight basket used in the calculation of its Northwest European high sulfur fuel oil netback cargo assessment to exclude Russian load ports and take into account changing trade flows into Europe, effective Jan. 3, 2023.

This was considering an upcoming EU ban on Russian oil product imports from Feb. 5, 2023, and followed the decision by Platts to exclude Russian-origin material in its HSFO assessments from Oct. 3, 2022:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/100322-platts-excludes-russian-origin-product-from-european-35s-fo-feedstocks-assessments

It also followed a decision note on this subject published Nov. 22 and available here:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/112222-platts-to-change-european-fuel-oil-netback-freight-basket-jan-3-2023

And an earlier proposal published Oct. 25 and available here:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/102522-platts-proposes-to-change-european-fuel-oil-netback-freight-basket-jan-3-2023

Observations of changing trade flows so far as well as market feedback suggested that the HSFO CIF NWE cargo market will increasingly be served by the Amsterdam-Rotterdam-Antwerp region, Le Havre and Klaipeda.

The changes and the affected assessments are as follows:

FO 3.5%S CIF NWE Cargo (PUABA00)

FO 3.5%S FOB NWE Cargo (PUABB00)

The freight basked used to calculate FOB NWE HSFO cargoes (basis Baltics) as a freight netback from CIF NWE HSFO cargoes (basis Rotterdam) is as follows:

Load Port Discharge Port

Antwerp Rotterdam

Klaipeda Rotterdam

Le Havre Rotterdam

The updated basket continues to use the dirty Baltic-UKC 30kt Wsc (TDADY00) freight rate.

Platts will continue to monitor prevailing trade flows. Platts has also clarified that it may normalize bids, offers, and trades reported in its Market on Close assessment process into ports other than the basis through daily review of prevailing flow.

Please send any feedback, questions or comments to europe_products@spglobal.com and pricegroup@spglobal.com.

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