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

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

This follows a proposal published on June 2, 2017: https://www.platts.com/subscriber-notes-details/21916578 Platts does not currently publish assessments of VGO in the Black Sea or the Mediterranean. Platts will 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 basket of Black Sea ports for both HSVGO and LSVGO is as follows: Taman, Kavkaz, Kerch, Tuapse, and Novorossiysk.

Oil loading in the Mediterranean may also be reflected in the assessment where relevant, but will be normalized back to the Platts basket of ports. Platts considers CIF Mediterranean (basis Malta) and FOB Black Sea as related markets and will assess FOB Black Sea VGO as a freight netback from the CIF Mediterranean (basis Malta) assessment. As part of this change, Platts will publish bids and offers for VGO cargoes CIF Mediterranean (basis Malta).

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 15-35,000 mt range, normalized to 30,000 mt. FOB VGO assessments currently include larger cargo sizes when the arbitrage route to the US is open.

The change is part of a suite of amendments to Platts assessments of VGO, which also includes the rebasing of the FOB NWE assessment to a FOB Baltic Sea assessment.

Platts currently publishes all European feedstocks assessments as outright price values in US dollars per metric ton, and this will also remain the case following the change. Platts had originally proposed to also publish differentials to front month ICE Brent Futures in US dollars per barrel.

Please send all comments to europe_products@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.