Platts opens consultation on European crude oil assessments that reflect Russian crude, exports from Russian ports

Platts, part of S&P Global Commodity Insights, is opening a consultation on its European oil assessments that reflect the spot value of Russian crude and crude exports from Russian ports.

The assessed grades include Urals loading from the Russian ports of Primorsk and Ust-Luga in the Baltic Sea; CPC Blend, Siberian Light, and Urals, all of which can load from the port of Novorossiisk in the Black Sea and Eastern Siberian Pacific Oil (ESPO) loading from Kozmino.

Platts understands that EU sanctions (Council Decision CFSP 2022/884 published June 3) will impact the merchantability of these grades in European markets to various degrees.

The sanctions package imposes a complete import ban on all seaborne Russian crude oil to the EU from Dec. 5, 2022, with spot market transactions and execution of existing contracts to be permitted for six months until then.

It will also impose a ban on EU operators insuring and financing the shipping of oil from Russia to third countries.

The sanctions package includes a provision (Council Decision CFSP 2022/884 section 13) in compliance with the principle of the freedom of transit.

The section states that the prohibitions should not apply to crude oil where Russia is the exporter of record but the origin of the crude is identified as a third state.

Platts understands that the presence of Russian-origin material in the predominantly Kazakh CPC Blend stream, and Kazakh-origin material in the predominantly Russian Urals stream loading from Novorossiisk may also impact trading activity in those markets before and after the sanctions take effect.

Platts is therefore seeking feedback on the current methodology for its CPC Blend, ESPO, Siberian Light, and Urals spot assessments in the context of this trading environment in Europe.

It is also seeking feedback on the spot market for Kazakh origin Urals cargoes.

While CPC Blend, Siberian Light, and Urals cargoes typically trade on a cost, insurance and freight (CIF) basis referencing cargo loading dates, Platts is seeking feedback on whether trading behavior is shifting towards trading on a free on board (FOB) basis given the sanctions in Europe.

In markets where no sanctions have been applied to imports of Russian crude oil and in which observable spot market activity is ongoing, Platts will continue to publish its assessments of these flows as part of its commitment to pricing transparency.

Further guidance on sanctions and embargoed material in Platts price assessment processes can be found here:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/030222-further-guidance-on-sanctions-embargoed-material-in-s-p-global-commodity-insights-platts-price-assessment-processes

This consultation relates to the following Platts assessments:

These assessments appear on Platts Global Alert and Platts Crude Alert pages 1210, 1220, 1221, 1224, 1617; in Crude Oil Marketwire and Oilgram Price Report; as well as in the Platts price database under the codes above.

Please send all feedback, comments or questions by July 15 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.