SUBSCRIBER NOTE: Platts to amend demurrage formula for Black Sea crude FOB netback assessments

Following a period of feedback, S&P Global Platts will amend how demurrage is reflected in the calculation of its crude oil assessments from the Black Sea to reflect delay time through the Turkish straits from January 2, 2020.

The decision follows on from a proposal published July 4 and available here: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/070419-pl atts-proposes-to-amend-demurrage-formula-for-black-sea-crude-fob-netback-asses sments

Platts Black Sea netback calculations currently reflect total journey time between load port in the Black Sea and delivery port in the Mediterranean, which includes the full transit time through the Turkish straits.

Platts methodology for Turkish straits calculations is available in a subscriber note published June 7, 2019, and available here: https://www.spglobal.com/platts/en/our-methodology/subscriber-notes/060719-pl atts-clarifies-turkish-straits-delays-assessment-methodology

Platts understands that general market practice is to allow for two days journey through the Turkish straits each way, with only the time spent in excess of these two dates used in the final calculation of demurrage.

With this change, Platts will reflect demurrage time through the Turkish straits rather than full transit time.

For example, if the journey through the Turkish straits was assessed at four days each for both north-bound and south-bound voyages, Platts Black Sea netback calculations would account for two days of demurrage each way.

Similarly, if the journey through the Turkish straits was assessed at two days each for both northbound and southbound voyages, Platts Black Sea netback calculations would demonstrate no additional demurrage calculation.

This change will impact the following assessments:

Assessment Outright Differential Urals FOB Novorossiisk Suezmax AAGZS00 AAHPH00 Urals FOB Novorossiisk Aframax AAOTH00 AAOTI00 CPC Blend FOB Suezmax AALVX00 AALVZ00 CPC Blend FOB Aframax AAOFV00 AAOFW00 Azeri Light FOB Supsa AATHM00 AATHN00

Please send all further feedback and comments 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.