Platts to update flat rate basket for 3 AG LR1 clean tanker assessments

Platts from S&P Global Commodity Insights will update the basket of ports used in the dollar per metric ton calculations for its Arab Gulf to Japan, Arab Gulf to South Korea and Arab Gulf to Singapore, Long Range 1 clean tanker assessments, effective July 1.

Platts will replace Iran's Bandar Mahshahr with Saudi Arabia's Ras Tanura as one of the load ports in the flat rate baskets on each of the three routes.

Platts, first proposed these changes in a subscriber note published May 19, 2022: http://plts.co/jFKA30sl0uH.

In markets where freight is traded on a Worldscale basis, Platts publishes freight assessments in points, which reflect a percentage of the prevailing Worldscale annual flat rates. Platts also publishes equivalent $/mt freight rates for these markets, based on a basket of Worldscale flat rates comprising several key routes between the two regions specified in the assessment.

According to data from Platts CFlow ship and commodity tracking software from S&P Global, exports of refined products from Bandar Mahshahr have remained very low in recent years, with no LR1 loadings observed from this port since end-2018.

Further analysis of LR1 vessel flow data shows that since 2020, Ras Tanura, Jubail and Ruwais have accounted for a 36% share in the trade flows on the Persian Gulf-North Asia route and 32% on the Persian Gulf-Singapore route.

Although Qatar's Ras Laffan port has a 27% loading share for LR1 tonnage flow from the Persian Gulf to North Asia, for example, Platts understands that there are terminal restrictions at this port. In addition, condensate makes up a substantial share of loadings at Ras Laffan, which may trade at a differential versus other clean products such as naphtha.

Following the change to the flat rate baskets, the new $/mt calculations will be based on the average of the following routes:

The affected assessments are published in Clean Tankerwire and Clean Tankerwire Monthly; on Platts Shipping Alert pages 330, 331 and Platts Tanker Alert pages 2922, 2923; as well as in the Platts price database under the codes below:

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