SUBSCRIBER NOTE: Platts opens formal review of global residuals and bunker assessments

Following an extended period of review, Platts is opening a formal consultation regarding all of its residual fuel, fuel oil and bunker fuel assessments globally in light of the planned International Maritime Organization limitations on sulfur in marine fuels from 2020. Platts invites comments, questions and other feedback by September 1, 2017.

BACKGROUND: On October 27, 2016, the IMO confirmed its decision that it would move ahead with a proposed reduction of sulfur limits in marine fuels to 0.5% from January 1, 2020. The cap had first been proposed in 2008 but was subject to review ahead of the implementation date.

Since January 3, 2012, Platts has fully reflected revised bunker fuel specifications set out by the International Convention for the Prevention of Pollution from Ships (MARPOL) in global bunker fuel assessments. Under amendments to Annex VI of the convention, high sulfur bunker fuel supplied at major global bunkering locations from 2012 onwards can contain a maximum of 3.5% sulfur, down from the previous maximum sulfur content of 4.5%.

PLATTS ASSESSMENTS: Globally, Platts assesses 180 CST, 380 CST and 500 CST marine fuels at a range of locations on ex-wharf and delivered bases. The worldwide market generally follows similar specifications for these grades in all locations. Platts reflects specifications defined by the International Organization for Standardization in document ISO 8217:2005 (E) - Petroleum products - Fuels (class F) - Specifications of marine fuels.

Platts also assesses fuel oil cargoes in several key locations, including Houston, Rotterdam and Singapore, with specifications that generally allow deliverability of material into the local bunker fuel markets.

In addition, Platts assesses Marine Gasoil and Marine Diesel fuels in several locations, typically with sulfur limits of 1.5%, but also assesses lower sulfur MGO and MDO in some locations.

Platts also publishes Bunkerworld average price indications across a broader range of specifications, including low and ultra low sulfur MGO and MDO fuels in some locations.

Platts bunker prices are published in Bunkerwire, Bunkerworld and Platts Global Alert, among others.

SCOPE OF REVIEW: Platts seeks to assess grades and locations that are most widely tradeable and reflective of typical market practices. The MARPOL limits on sulfur are likely to create a significant shift in tradeable grades ahead of and through the implementation date.

Platts is seeking feedback on the most relevant residual oil and bunker fuel grades to assess from 2020 onwards, as well as the form of such assessments and the process and timing of any changes.

Ahead of the previous implementation of reduced MARPOL sulfur limits, Platts announced that all of its existing 180 CST, 380 CST and 500 CST bunker fuel assessments would reflect 3.5% sulfur after the implementation date.

However, Platts is considering feedback that the change would see most shipping fuel markets change to the use of low sulfur distillate grades or other alternative blends of low sulfur material.

As a result, Platts may consider introducing a new suite of bunker assessments that meet the MARPOL requirements ahead of the change, as well associated cargo assessments in key locations, while continuing existing assessments.

Typically Platts gives significant lead time for any major changes to benchmark assessments, including changes to specifications.

In addition, Platts is seeking feedback on the most appropriate way in which to reflect historic and future changes to ISO specifications.

FEEDBACK: Platts invites comments, questions and other feedback on these proposals by September 1, 2017. Please send all comments, feedback and questions to oilgroup@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 upon request.