Platts reflects WTI Midland cargoes in Dated Brent from May 2

• Dated Brent reflects WTI Midland deliveries from May 2
• Cargo size on all Dated Brent grades moves from 600,000 to 700,000 barrels from June cargoes

Platts, part of S&P Global Commodity Insights, confirms that Dated Brent now reflects WTI Midland cargoes delivered to Rotterdam effective May 2.

This follows an original proposal published Feb. 14, 2022 and available here:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/021422-platts-proposes-to-reflect-wti-midland-in-dated-brent-cash-bfoe-from-june-2023-keeps-brent-assessments-on-an-fob-basis

And a decision note published June 8, 2022 and available here:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/060822-platts-to-reflect-wti-midland-in-dated-brent-cash-bfoe-from-june-2023

And a clarification note on Dated Brent methodology published April 21, 2023 and available here:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/042123-platts-updates-guidance-on-dated-brent-methodology-including-freight-deemed-bl-pricing-from-may-2

EFFECTIVE DATE: From the May 2 assessment, Dated Brent reflects cargoes of WTI Midland crude being delivered into Rotterdam in June. CIF WTI Midland cargoes from the June 1-5 laycan onwards are reflected in Dated Brent. A June 1-5 delivery into Rotterdam would be netted back to a Free on Board (FOB) North Sea deemed Bill of Lading (B/L) date starting May 31. On June 1 the value for WTI Midland on a FOB North Sea basis is compared to the value of FOB Brent Blend, Forties, Ekofisk, Oseberg, and Troll. This continues for a June 2-6 WTI Midland delivery, when the FOB North Sea equivalent value of Midland is compared to the other Dated Brent grades on that date. This means that WTI Midland is introduced into Dated Brent in a phased manner through May until all days of the assessment period reflect WTI Midland.

CARGO SIZE: From June cargoes, Dated Brent and Cash BFOE reflect 700,000 barrel cargoes, with a tolerance of +/-1%.

CROSS-MONTH CARGOES: With the cargo size on Brent Blend, Forties, Oseberg, Ekofisk, and Troll increasing from 600,000 barrels to 700,000 barrels from June 1, Platts is aware of the possibility that certain late-May 600,000 barrel cargoes could be force-deferred by a North Sea terminal. Platts will publish bids/offers for a limited time for 600,000 barrel cargoes on a Free-on-Board (FOB) basis as long as evidence can be provided that the terminal force-deferred the cargo in question. Platts will not publish any bids/offers on a CIF basis for 600,000-barrel cargoes force-deferred into June.

PRICING: For the purposes of assessment, Platts views all delivered WTI Midland indications, once moved back to a deemed Bill of Lading (B/L), as pricing 2-1-2 around deemed B/L. In line with the existing BFOET grades, Platts publishes bids and offers versus Dated Brent pricing 2-1-2 around deemed B/L, and versus Cash BFOE, ICE Brent futures or on an outright price basis. These are the only forms of pricing which Platts publishes bids and offers for in the MOC. Platts deems the B/L on WTI Midland bids and offers to be one day ahead of the first day of the delivered laycan.

DEVIATION: If no agreement can be reached between buyer and seller on deviation costs, Platts expects counterparties to use the difference between the freight cost from the US Gulf Coast loading terminal of the original cargo-Rotterdam versus the US Gulf Coast-actual discharge port. In the case of deviations to the Mediterranean, counterparties should use the Platts Worldscale assessments for US Gulf Coast-UK Continent (TDUCG00) and US Gulf Coast-Mediterranean (TDUWS00) to calculate the deviation costs unless mutually agreed otherwise.

VESSEL SIZE: All WTI Midland delivered indications in the Platts MOC should be from Aframax vessels, carrying UK Continent and Mediterranean charterparty options. A seller may deliver from an Aframax that has performed a ship-to-ship transfer from another vessel, provided all of the oil on board that vessel has demonstrably loaded at one of the US Gulf Coast terminals approved by Platts. A buyer should not be harmed by a seller's decision to STS onto an Aframax from a vessel which may already be in the North Sea. Any deviation costs from the final vessel should still be calculated by reference to shipping costs from the US Gulf Coast to the UK Continent or Mediterranean.

PAYMENT: Platts views the standard payment for WTI Midland in the Platts Market on Close assessment process to be 30 days after the deemed B/L of the cargo for equivalent loading dates in the North Sea.

INCOTERM: Platts publishes bids and offers for WTI Midland on CIF (Cost, Insurance and Freight) and CFR (Cost and Freight) incoterms. CFR indications may be normalized for insurance costs.

FREIGHT ADJUSTMENT FACTOR: WTI Midland indications are adjusted to a FOB basis by being moved back one day to the deemed B/L and by deducting a North Sea-Rotterdam Freight Adjustment Factor (FAF). The FAF is calculated using a volume-weighted average of freight values for the five North Sea ports of Sullom Voe, Hound Point, Sture, Teesside, and Mongstad.

Further details on the Freight Adjustment Factor for WTI Midland can be found in the following clarification note, published April 20:

https://www.spglobal.com/commodityinsights/en/our-methodology/subscriber-notes/042023-platts-clarifies-wti-midland-freight-adjustment-factor

TESTING: Platts understands that typical market practice for the testing of WTI Midland cargoes is basis the load port shore tank. Sellers of WTI Midland cargoes in the Platts Market on Close assessment process are expected to deliver material into a trade that meets all Platts specifications.

Please send all further comments to europe_crude@spglobal.com and pricegroup@spglobal.com.

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