Mercuria challenges Baltic Exchange Hormuz freight benchmark in UK court

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Mercuria challenges Baltic Exchange benchmark

Highlights

Mercuria is suing the Baltic Exchange in the English High Court, seeking suspension of the TD3C benchmark and invalidation of publications since early March 2026.
The case could force hundreds of trades to be unwound, threatening billions of dollars in oil freight derivatives valued using Baltic assessments, and prompting industry-wide concern.
The International Energy Agency reports shipping oil can now cost up to five times more than last year, intensifying the market impact of benchmark disputes and freight pricing volatility.

High Court case tests benchmark methodology

As reported by the Financial Times, Mercuria is suing the Baltic Exchange in the English High Court over its decision to continue publishing the TD3C benchmark, which tracks the daily cost of transporting 270,000 metric tonnes of crude oil from the Middle East Gulf to China.

Mercuria argues the benchmark should have been paused after shipping traffic through the strait fell sharply and Iran said the waterway was closed. The trader is seeking declaratory relief rather than damages, asking the court to require the Baltic to suspend TD3C and invalidate publications issued since early March 2026.

The Baltic says periods of little or no activity on a route are not unusual and maintains that some tankers continue to pass through the waterway carrying oil. It also says it relies on experienced shipbrokers who continue to submit rate assessments, while chief executive Mark Jackson says the exchange meets its statutory, contractual and regulatory obligations and considers Mercuria’s claim without merit.

Market implications for oil and freight trading

The dispute is being watched closely by traders, brokers and shipping executives because Baltic assessments are used to price freight costs in an opaque market and to value derivatives worth billions of dollars. Lawyers for the Baltic say a Mercuria victory could have chaotic consequences across the market, and people close to the exchange warn that hundreds of trades might have to be unwound.

Industry participants say the case also reflects wider pressure on benchmark pricing as tanker routes are exposed to geopolitical conflict. Platts, a key competitor, suspended its own assessment process for oil grades shipped through Hormuz two days after the war began, while the Baltic this month launched TD34, a new benchmark covering cargoes from Fujairah to China.

Freight pricing is becoming more significant for commodity markets as transport costs account for a larger share of delivered oil prices. According to the International Energy Agency, the cost of shipping a barrel of oil is in some cases as much as five times higher than last year, increasing pressure on hedging strategies and end-user costs.

Our earlier report on the surge in crude oil shipping costs described how conflict-related risks around routes such as the Strait of Hormuz and the Red Sea pushed tanker rates to record levels, making freight a much larger component of delivered oil prices. We also noted the knock-on effects for import-dependent markets and refiners, alongside the windfall for tanker owners as charter earnings jumped sharply.

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