Platts clarifies CPC Blend assessment methodology

Platts, part of S&P Global Commodity Insights, clarifies the CPC Blend assessment methodology relating to emerging market practices for the AWRP cost and the title and risk transfer following Russia's invasion of Ukraine.

AWRP

Platts understands that in current market practice the Additional War Risk Premium (AWRP), an additional insurance product that emerged in the market following Russia's invasion of Ukraine, is for the seller's account.

As such, for CPC delivered Augusta bids, offers and trades in the Platts Market on Close assessment process, Platts will reflect value with the AWRP cost being paid by the seller.

TITLE AND RISK

Platts understands that some buyers of delivered CPC Blend cargoes in the wider market are requesting delayed transfer of title and risk. Platts understands buyers are requesting that the title and risk passes at the point the vessel has passed through the Dardenelles, rather than at loadport.

Platts also understands that while this may not be market practice for every trade, many sellers are willing to agree to delayed title and risk transfer.

As such, Platts will publish bids and offers requiring delayed transfer of title and risk in the MOC, but these may be subject to normalization for assessment purposes.

CERTIFICATE OF ORIGIN

Platts previously announced on Sept. 23, 2022, that cargoes carrying a Russian certificate of origin (COO) would be excluded from CPC Blend assessments from Oct. 3, 2022. As such, bids, offers and trades reported in the MOC will need to be performed upon with cargoes carrying a Kazakh-origin COO.

The subscriber note for that change can be found here:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/092322-platts-to-exclude-russian-origin-cargoes-from-cpc-blend-assessments-amend-fob-netback-calculations

Please send all feedback, comments or questions 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.