Platts to continue monitoring Russian-origin ULSD market

Platts, part of S&P Global Commodity Insights, is seeking continued feedback on how the Russian-origin diesel market is expected to evolve and what role a price assessment reflecting the value of Russian diesel could play in this evolution.

Platts Nov. 22 opened a consultation seeking industry feedback on how best to provide continued transparency into the Russian-origin diesel market once EU sanctions on Russian oil products come into force in February.

In particular, Platts invited feedback on the future of the ULSD CIF NWE (all origin) assessment (price symbol ALORA00) and related all origin spread (ALORB00), and whether the assessments should be discontinued or amended to reflect the continued flow of Russian oil products to markets outside the EU.

EU sanctions prohibiting the import of Russian oil products are due to come into force on Feb. 5, with the ULSD CIF NWE (all origin) assessment no longer reflecting Russian-origin product as its current methodology is on a CIF Northwest Europe basis.

The subscriber note announcing the consultation can be reached at: https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/112422-methodology-platts-opens-consultation-on-russian-origin-ulsd-market

Feedback so far suggests there has been a limited change of traditional flows of Russian material ahead of EU sanctions.

Industry feedback has further indicated that EU sanctions on Russian oil products and proposed price caps will likely determine a reshaping of traditional flows of Russian material to destinations outside the EU.

As such, Platts will continue to monitor flows of Russian-origin diesel, as well as the emergence of trading hubs for the product.

In the interim, the methodology underpinning the ULSD CIF NWE (all origins) assessment (ALORA00) and related all origin spread (ALORB00) will remain unchanged, reflecting non-sanctioned material.

In addition, Platts will monitor whether FOB or delivered incoterms are expected to be the prevalent method for trading Russian material and, alongside that, emerging standards on clip sizes, loading times and other relevant pricing parameters.

The all origin assessment currently reflects diesel from all origins, including Russia, meeting French specification for delivery basis Northwest Europe 10-25 days forward from date of publication, and a 30,000 mt cargo size.

Platts launched the assessment on June 1, 2022 to give transparency into the continued flow of Russian diesel to some importers, whilst excluding Russian origin from its Northwest European and Mediterranean benchmarks.

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

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.

Platts will consider all comments received and will make comments not marked as confidential available to the public upon request.