14 Apr 2020 | 16:05 UTC — New York

Platts extends consultation on ULSD Med freight routes

S&P Global Platts is extending a formal consultation around prevailing flows of diesel in the Mediterranean from March 30 to April 30, in order to seek further market feedback.

Specifically, Platts is seeking feedback on possible updates to the sea routes used in the calculation of its netback for the FOB Med ULSD cargo assessment and in freight normalizations for the CIF Med ULSD cargo assessment.

This note extends the feedback period announced with a subscriber note published January 23 and available at: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/012320-platts-opens-consultation-on-ulsd-med-netback-freight-basket. It also amends previous incorrect wording around the current calculation of the 10 ppm ULSD FOB Med cargo assessment (Code: AAWYY00).

FOB Med Netback

Currently, Platts derives its 10 ppm ULSD FOB Med cargo assessment (Code: AAWYY00) by applying a freight netback to the 10ppm ULSD CIF Med cargo assessment (AAWYZ00). The calculation is currently based on routes in the Mediterranean: Santa Panagia, Aliaga, Agioi Theodoroi and Batumi to Genoa and Lavera using the daily freight rates published in the Platts Clean Tankerwire for Med-Med 30,000 mt cargoes. Platts is seeking feedback to replace the Black Sea port of Batumi by another Black Sea port -- namely Tuapse or Novorossiysk-- within the basket of four ports used for the netback calculation for the 10 ppm ULSD FOB Med cargo assessment. Platts is also seeking any feedback on the timing of this potential methodology change.

Freight normalization in CIF Med 10ppm ULSD MOC

Additionally, in order to better reflect flows from the Black Sea into the Mediterranean region, Platts also welcomes feedback the addition of a Black Sea port to the reference freight basket used as guidance to normalize indications received in the CIF Med diesel cargo Market on Close process back to the reference port of Lavera. Platts has observed significant increases in export volumes of 10ppm diesel destined to the Mediterranean from Black Sea ports such as Tuapse and Novorossiysk. Currently indications elsewhere than in the basis port of Lavera may typically be normalized back to the reference port of Lavera using a basket of the following three loadports: Santa Panagia, Cartagena and Agioi Theodoroi.

Platts welcomes feedback from market participants regarding prevalent trade flows of diesel in the Mediterranean to ensure that the assessment continues to be representative of flows within the region. The 10ppm ULSD CIF Med cargo assessment is available in Platts European Marketscan, Oilgram Price Report and in the Platts pricing database under code AAWYZ00. The 10ppm ULSD FOB Med cargo assessment is available in Platts European Marketscan, Oilgram Price Report and in the Platts pricing database under code AAWYY00.

Please send any comments or queries by April 30, 2020, to europe_products with a cc to pricegroup 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.