Platts clarifies performance expectations regarding trading norms around OFAC sanctions on Strait of Hormuz transit

Platts, part of S&P Global Energy, understands from market participants that the execution of trades for cargoes transiting the Strait of Hormuz has been evolving from a sanctions compliance standpoint.

Since the US Office of Foreign Assets Control issued a sanctions risk alert on May 1 regarding "toll" payments for cargoes transiting the Strait of Hormuz, and subsequently issued an update Aug. 24, many market participants have made Platts aware that, for cargoes that have transited or may be transiting the Strait of Hormuz, companies may opt to include additional wording in their contracts to ensure compliance with the latest OFAC sanctions alert.

While Platts understands that an industry standard for what could be broadly acceptable additional contractual language has yet to emerge among market participants, Platts expects companies to be reasonable and to bilaterally agree on any such contractual terms in order to execute trades reported in the Platts Market on Close assessment process in these markets.

Under Platts assessment guidelines, commodities supplied from countries or entities subject to applicable trading embargoes and sanctions should not be delivered against transactions concluded during the MOC.

Platts' guidelines on embargoed/sanctioned products can be found in the Methodology and Specifications Guide.

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