Platts to exclude Russian-origin product from European 3.5%S FO, feedstocks assessments

Platts will not reflect Russian-origin product in its European 3.5%S fuel oil and feedstock assessments effective Oct. 3.

The decision by Platts, part of S&P Global Commodity Insights, follows a review into the continued inclusion of Russian-origin material in its European fuel oil and feedstock assessments, announced in a subscriber note published April 19, and available here:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/041922-s-p-global-seeks-feedback-on-russian-product-in-platts-european-fuel-oil-feedstocks-assessments

Feedback gathered from the market, as well as observed market activity in recent weeks, has shown a significant move away from Russian-origin material in the spot market.

Platts has observed in recent months that an increasing number of market participants have been restricting material from Russia, in part or entirely, in their spot fuel oil and feedstocks trading activity.

Although some Russian product continues to flow to the European market, Platts understands that it is not trading on the same basis as product from other origins in the spot market, and that there is a difference in value between Russian and non-Russian product.

In addition, the European Unions fifth sanctions package came into effect Aug. 10 encompassing products falling under CN code 2707, which traders say is often applied to 3.5%S FO due to its high aromatic content, which exceeds 50%. The exclusion of Russian-origin product will apply universally across all European HSFO and feedstocks assessments, irrespective of the customs code designated to the product.

As a result, with effect from Oct. 3, the Platts assessments listed below will exclude Russian-origin product. Bids, offers and trades reported in the Platts Market on Close assessment process for these assessments will therefore reflect non-Russian-origin product with effect from the same date.

Although the FO 3.5%S CIF Northwest Europe cargo assessment typically reflects standard cracked Russian quality M-100, Platts may publish bids and offers in the MOC process for high sulfur fuel oil delivered into Northwest Europe with similar specifications which could be subject to normalization.

Clarification of the standards for assessments that exclude Russian-origin material is available at https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/062322-platts-clarifies-standards-for-assessments-that-exclude-russian-origin-material.

Platts will continue to monitor prevailing trade flows and review the plausible load ports in these assessments, including the continued inclusion of Russian load ports.

Please send additional feedback, questions or 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.