SUBSCRIBER NOTE: Platts proposes to publish FOB Black Sea, CIF Med VGO assessment

In line with changing trade flows of high sulfur vacuum gasoil (HSVGO) and low sulfur vacuum gasoil (LSVGO) in Europe, S&P Global Platts proposes to launch assessments of VGO for the developing Black Sea and Mediterranean markets, starting January 2, 2018.

Platts does not currently publish assessments of VGO in the Black Sea or the Mediterranean. Platts is proposing to publish both HSVGO and LSVGO assessments of FOB Black Sea (basis a basket of Black Sea ports) cargoes, and CIF Mediterranean (basis Malta) cargoes.

The proposed basket of Black Sea ports for both HSVGO and LSVGO is as follows: Taman, Kavkaz, Kerch, Tuaps, and Novorossiisk.

Oil loading in Mediterranean may also be reflected in the assessment where relevant, but would be normalized back to the Platts basket of ports. Platts proposes to consider CIF Mediterranean (basis Malta) and FOB Black Sea as related markets which are frequently linked by freight costs.

Platts believes that the currently assessed VGO cargo sizes and specifications in NWE are broadly relevant to the Mediterranean market. Platts VGO cargo assessments in NWE currently reflect a 15-35kt range, normalized to 30kt. FOB VGO assessments currently include larger cargo sizes when the arbitrage route to the US is open.

Platts currently publishes all European feedstocks assessments as outright price values in US dollars per metric ton. As well as continuing this practice for the proposed new assessments, Platts proposes to supplement these by also publishing differentials to front month ICE Brent Futures in US dollars per barrel, in line with the way VGO is typically traded in Europe.

Following this proposed launch, Platts would publish the following differentials and outright price assessments for both HSVGO and LSVGO: * CIF Med (basis Malta) cargoes * FOB Black Sea cargoes

The proposed launch is part of a suite of proposed changes to Platts assessments of VGO, which also include the discontinuation of barge assessments for both LSVGO and HSVGO in Europe, and the rebasing of the FOB NWE assessment to a FOB Baltic Sea assessment.

Platts is requesting feedback on all aspects of this proposal. Please send all comments by June 23, 2017, 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.