Platts clarifies UK continent deviation fallback for WTI Midland in Dated Brent

Platts, part of S&P Global Commodity Insights, clarifies the fallback mechanism for WTI Midland cargo deviations within the UK continent range in the Platts Market on Close assessment process.

Platts clarifies that, in the case of deviations within the UK continent range, counterparties should use an average of Platts Worldscale assessments for the US Gulf Coast-UK Continent route [TDUCG00] within the period 22-27 days prior to the delivery laycan to calculate deviation costs unless mutually agreed otherwise.

This period is equivalent to what Platts understands the typical USGC Aframax fixing period to be, of 5-10 days prior to USGC loading, assuming a 17-day sail time to Rotterdam.

If no agreement can be reached between buyer and seller on deviation costs, counterparties should use the lower of the fallback mechanism and the charterparty rate to determine reasonable costs.

This clarification aligns with Platts' understanding of the typical market practice to use the difference between the freight cost from the US Gulf Coast loading terminal-Rotterdam versus the US Gulf Coast-actual discharge port, and the example provided for deviations to the Mediterranean provided in the Platts Europe and Africa Crude Oil Specifications Guide: https://www.spglobal.com/content/dam/spglobal/ci/en/documents/platts/en/our-methodology/methodology-specifications/crude-oil/emea-crude-specifications.pdf

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