Platts proposes to discontinue MOPAG jet fuel/kerosene, gasoil LR2 assessments

S&P Global Platts is proposing to discontinue the publication of its FOB Arab Gulf jet fuel/kerosene, gasoil LR2 assessments from January 4, 2021.

This follows another proposal by Platts to amend the methodology for its FOB Arab Gulf benchmarks for gasoline, gasoil, jet fuel/kerosene and fuel oil to reflect independent, spot physical market values from January 4, 2021. Under this proposal, the MOPAG assessments would reflect the same specifications and terms of the existing differentials for cargo sizes of 200,000-300,000 barrels each (http://plts.co/LOy730qVMhq).

Currently, the jet fuel/kerosene and gasoil LR2 assessments are assessed as a netback from the benchmark FOB Singapore assessments using 80,000 mt (LR2) ship freight rates.

Platts has observed little liquidity in recent years on these fuels being shipped on these ship sizes, as spot activity in the Middle East middle distillates market is mostly centered around MR and, to a certain extent, LR1-sized cargoes.

The Worldscale outright basis rate used to calculate the FOB Arab Gulf assessments is based on the average of four ports, namely Jubail, Bahrain, Ras Tanura and Mina al-Ahmadi, inclusive of port charges at Jubail and Ras Tanura, to Quoin Island, plus the Worldscale outright basis rate from Quoin Island to Singapore.

This outright basis rate is changed once a year on the first working day of the new year and is applicable till the last working day of the year.

The actual freight applied to derive the FOB Arab Gulf netback is calculated by multiplying the base rate against the Worldscale freight spot assessment for 80,000 mt for the Arab Gulf-Singapore route as published daily in Platts Clean Tanker Wire. The final calculation is divided by 7.9 for jet fuel/kerosene, and 7.45 for gasoil to convert $/mt into $/b.

These assessments appear in Asia-Pacific/Arab Gulf Marketscan and Platts Global Alert pages 2004, 2420, 2404, 2005, 2421, 0027, 0035, 2405, 2402 and 2403 under the price database codes as below:

Assessment Code Monthly average

Kerosene LR2 AAKNZ00 AAKOA00

Gasoil LR2 AAKBT00 AAKBU00

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