Platts replaces ship guidelines with volume for CIF Rotterdam, FOB STS Scapa Flow crude oil

After a period of market feedback, S&P Global Platts has amended the volume guidelines for its Dated Brent cost, insurance and freight (CIF) Rotterdam and free on board (FOB) ship-to-ship (STS) Scapa Flow crude oil assessments, effective April 21, 2021.

This follows a decision note published Feb.19, which is available here:

https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/021921-platts-to-replace-vessel-guidelines-with-volume-for-cif-rotterdam-fob-sts-scapa-flow-crude-oil

And a proposal note published Jan. 28, which is available here:

https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/012821-platts-proposes-to-use-volume-for-cif-rotterdam-fob-sts-scapa-flow-crude-oil

As a result of the decision, Platts has removed the 'mother/daughter' ship restrictions on FOB STS and CIF Rotterdam cargo offers in its Dated Brent Market on Close assessment process.

Instead, Platts now reflects a minimum volume that could be offered in the MOC process.

In practice, this extends the number of cargoes that can be offered to 'granddaughter' ships and beyond, provided the cargoes on offer meet the minimum volume requirements and continue to reflect standard cargo quality.

Platts previously only published 600,000 barrel CIF Rotterdam and STS BFOET cargo offers in the MOC, with an operational tolerance of plus or minus 1%.

Under this updated methodology, Platts continues to reflect 600,000-barrel cargoes in its assessments, but will publish CIF Rotterdam and STS offers for smaller cargoes.

These offers may be subject to normalization for the purposes of the assessment. Platts will reflect cargoes with a minimum stated volume of 580,000 barrels with an operational tolerance of plus/minus 1%.

Companies that wish to submit an offer for publication using the eWindow publishing platform with a volume less than 600,000 barrels should state the volume in the Terms Quality Conditions (TQC) box.

The original FOB cargo would be expected to have loaded 600,000 barrels, plus/minus 1%, at one of the five terminals supplying physical BFOET crude oil, and the quality of the supplied crude oil must be congruent with the quality recorded at the time of its original FOB loading.

This decision follows market feedback indicating that end-user volume flexibility is greater than 1% around 600,000 barrels, and that standard market practices already exist to settle volume losses beyond previously-agreed limits.

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