SUBSCRIBER NOTE: Compensation on late performance in FOB Singapore trades

Platts would like to remind market participants that for the Platts Market On Close assessment process for crude oil and refined oil products in Asia and the Middle East, all bids, offers and transactions are published on the basis that participants will fulfill the full value of the physical contract.

Platts is aware that physical conditions regarding shipping, terminals, tanks or blending that are beyond the control of the seller or buyer may result in lateness, quality issues or conditions seen as a deviation from the original wording of the contract.

Platts will review patterns of logistical performance, as adjustments due to late performance and quality issues should be extraordinary and not recurring events, and also should not be seen as an indication of Platts condoning lateness.

Platts only recognizes bids, offers and transactions where no party claims a right to unilaterally cancel a transaction. If a transaction becomes difficult, the party causing the issue should seek resolution including alternative loadings, qualities, dates or book-outs.

A party deemed to have underperformed or not performed under the original contract is expected to compensate the affected party.

In almost all circumstances, the compensation is not, and should not be due to a flat price movement, but should be to include parameters such as backwardation, shipping costs, and the inconvenience for the buyer in the case of a seller not performing, or contango, storage costs and the inconvenience for the seller in the case of a buyer not performing.

Such adjustments should be fair and in line with market practice, and should be reciprocal in the event that the inverse situation occurs in the future.

Please send all queries and feedback to asia_oilproducts@platts.com and pricegroup@platts.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.