SUBSCRIBER NOTE: Platts proposes to reflect ex-Primorsk Urals indications in CIF Augusta Urals assessment

In light of changing trading patterns in the European Urals markets, Platts proposes to reflect bids and offers for 100,000 mt Urals cargoes, loading from the Baltic Sea port of Primorsk, in the CIF Augusta Urals assessment, starting from the assessment published January 2, 2020.

Under this proposal, Platts would publish bids and offers for 100,000 mt cargoes loading from the port of Primorsk on a CIF/CFR Augusta basis in the Platts Market on Close assessment process, which could then be reflected in the final Mediterranean Urals assessment. That assessment would continue to also reflect Urals indications for ex-Novorossiisk cargoes on a CIF/CFR Augusta basis.

Urals indications for ex-Novorossiisk cargoes on a CIF Rotterdam basis are not included under this proposal. The methodology for the CIF Rotterdam assessment would remain unchanged.

Platts understands that changing trade patterns within Europe -- including both the drop in Urals exports from the Black Sea, as well as the growth in demand for the grade in Asia -- has led a greater portion of the Urals refined in the Mediterranean region to be sourced from the Baltic Sea. This proposal aims to reflect that growing arbitrage supply to better reflect the value of Urals basis CIF Augusta.

ASSESSMENT SIZE: Platts proposes to widen the assessment volume for the CIF Augusta Urals assessment from 80,000 mt to 80,000-100,000 mt, with the assessment determined by factoring in both cargo sizes. Platts would continue to reflect bids and offers of 140,000 mt cargoes, but these indications would be normalized back to an 80,000-100,000 mt standard.

OFFERS: Platts would reflect 100,000 mt offers of cargoes loading from the Baltic Sea port of Primorsk on a CIF Augusta basis and would continue to reflect offers of 80,000 mt cargoes loading from Novorossiisk.

BIDS: Platts would continue to publish bids of 80,000 mt. In addition, Platts would now publish bids for 100,000 mt and 80,000/100,000 mt. Any cargoes hitting these 80,000/100,000 mt bids could be sourced from either the Baltic or Black Sea in the seller's option. Bids for 80,000 mt cargoes would not be supplied with 100,000 mt cargoes, and bids for 100,000 mt cargoes would not be supplied with 80,000 mt cargoes, unless changed through mutual agreement with the buyer. Nomination of cargo and vessel on 80,000/100,000 mt trades would be seven calendar days prior to the first day of the laycan in line with existing Urals nomination methodology.

LOADING DATES: Platts proposes to continue to reflect Urals cargoes loading 10 days forward from date of assessment to 25 days forward in both the CIF Rotterdam and CIF Augusta markets. Platts is specifically seeking feedback on whether to treat loading dates for 80,000 mt and 100,000 mt cargoes as equivalent or whether to account for differences in observed journey times at the time of trade.

FINAL ASSESSMENT: Platts assessments for Urals CIF Augusta would then reflect the most competitive value between the different cargo sizes on a CIF Augusta basis. For example, if an offer for 80,000 mt crosses a bid for 100,000 mt then the offer would prevail in the final assessment.

PREVIOUSLY-LOADED OIL: This proposal would continue to allow sellers to hit bids with previously loaded oil, provided the buyer is not harmed by the seller's decision to do so. Existing methodology around previously-loaded oil would continue to apply.

PART-CARGOES: Part-cargoes are not covered under this proposal. All indications reflected in the Platts Market on Close assessment process will continue to be full cargoes.

Please send all comments by May 31, 2019 to europe_crude@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.