Hormuz Chaos Sparks Legal Showdown Over Global Tanker Pricing

(Bloomberg) — Commodity trader Mercuria Energy Group accused the Baltic Exchange of continuing to publish the world’s benchmark oil tanker rate, despite distortions caused by the Iran war, because it feared losing business to a competitor.

Lawyers for Mercuria kicked off a London trial claiming that the Baltic Exchange should have suspended the benchmark rate after exports through the Strait of Hormuz were strangled by the conflict between the US, Israel and Iran. The Baltic Exchange said the commodity trader’s claim reflects “instability and opportunism.”

Founded in 1774, the Baltic Exchange plays a central role in setting global shipping rates. It maintains it was still possible to put a price on the freight risk, and that it had consulted consistently with the market after the Iran war severely disrupted oil shipments through Hormuz. Flows have since recovered close to pre-war levels. 

In an April 14 call, a senior freight assessor described the risk of the benchmark being replaced by a competitor as “the overriding fear of what we do here,” according to a document given to the court by Mercuria’s lawyers before the hearing on Monday.

Mercuria also gave examples of tanker market participants, including the Baltic Exchange’s own staff, who called into question the continued publication of a rate for the route. 

The trading house said that the Baltic Exchange’s freight assessor didn’t submit a value into the company’s internal system that’s supposed to represent his personal view of where the index will be. When he did eventually submit a value, it included comments such as “doesn’t make any sense to shed an opinion on this route — crazy that we have to!”

The case calls into question a pricing tool that until the Iran war acted as the benchmark for oil tanker earnings across the globe. The key TD3C rate underpins contracts between tanker owners and their customers as well as billions of dollars in derivatives. It’s based on the cost of hiring a supertanker from Saudi Arabia’s Ras Tanura, inside the Persian Gulf, to China, and also serves as a reference point for other routes.

The Baltic Exchange is confident that it has met all its statutory, contractual and regulatory obligations in the production of the TD3C benchmark, Chief Executive Officer Mark Jackson said in a statement. The claim from Mercuria is “without merit,” he added.

Mercuria has “huge index-linked exposures, which it has failed to risk manage,” lawyers for the Baltic Exchange said. After being caught out by the sharp rises in the benchmark, Mercuria “wishes to unseat TD3C, and it is reaching for any available argument to do so,” they added.

Mercuria’s lawyers said the evidence showed the Baltic Exchange did not suspend the index because it wanted to keep the market for certain freight agreements active, and to avoid the risk of being replaced by a rival. 

One of the brokers who contribute to the index said on April 2 that it was “utter nonsense” to provide an assessment of the TD3C benchmark, given the unprecedented levels of disruption to traffic through Hormuz, according to another transcript presented by Mercuria.

Mercuria is urging the court to declare that the Baltic Exchange breached its obligations and ought to have suspended the TD3C route. 

Lawyers for the Baltic Exchange said the risk of being replaced by a rival provider did not drive its decision making. The lawyers said passage through Hormuz was still possible. 

“The Baltic’s decision to continue publishing TD3C, was a decision which was not taken lightly,” lawyers for exchange said in a court document countering Mercuria’s allegations.

The Iran war threw global commodity markets into turmoil by slashing shipments through Hormuz, which Tehran declared closed in the early days of the conflict. In recent months, volumes have recovered, with most trackers seeing shipments close to pre-war levels. 

A spokesperson for Mercuria didn’t immediately respond to an email for comment. 

Mercuria initially said it had incurred losses estimated to be in the hundreds of millions of US dollars as a result of the Baltic Exchange continuing to publish the index, but removed any estimate of financial losses from its most recent claim.

© 2026 Bloomberg L.P.

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