Platts cuts Russian barrels from Asia fuel oil, bunker assessments

Quantum Commodity Intelligence - Price reporting agency Platts has added an exclusion on Russian-origin barrels to its Asian and Middle Eastern fuel oil and bunker fuel assessments in response to industry feedback.

According to a subscriber note published on 1 March, Russian-origin residual fuel cargoes and parcels will be excluded from its price discovery process, including all "wholly, or in part, produced, manufactured or processed in Russia, or exported from Russia".

The move follows consultation with traders and brokers, with "the majority" of feedback the firm received suggesting Russian oil was "no longer merchantable in the open origin" market, according to the firm.

Wednesday's announcement follows a series of other exclusions on Russian barrels by Platts over the past year following a full-scale attack on neighbour Ukraine in February 2022.

Traders have moved to upend large parts of traditional trade flows over the last year, with some major firms already excluding themselves from working with Russian oil to avoid legal and reputational risks.

"Oil market participants in Asia typically use G7-domiciled trade financing, shipping and insurance services to facilitate trade," Platts noted.

While some traders have moved to more favourable jurisdictions and have continued to work with Russian oil, the two-tier market formed around the origin has meant its inclusion in Platts' price discovery process threatened to distort the numbers it publishes.

Russian crude oil and products have been subject to various sanctions from the US, the EU, and several partners, ranging from outright import bans to restrictions on the price at which suppliers can work with Russian oil to reduce cash flow to Moscow.

Quantum competes with Platts to supply price assessments in the crude oil and products markets.