Mercuria sues Baltic Exchange over TD3C tanker benchmark

Mercuria Energy Group has filed a High Court claim against the Baltic Exchange, alleging that distortions in the TD3C benchmark caused losses estimated in the hundreds of millions of dollars【1】. The dispute centers on the rate used to price oil tankers from Saudi Arabia’s Ras Tanura to China—a route that now depends on the Strait of Hormuz, which has been largely shut down by the ongoing conflict.

The Baltic Exchange, a 282‑year‑old institution owned by Singapore Exchange (SGX), continues to calculate TD3C based on Ras Tanura shipments despite near‑total cessation of traffic through Hormuz【2】. That decision pushed the daily benchmark up to about $600,000, far above the typical $40,000‑$100,000 range, and triggered “extreme volatility” in contracts and derivatives tied to the index【1】. Mercuria says the benchmark no longer reflects the underlying market and that the continued use of the Hormuz‑dependent route “requires the payment of illegal tolls to sanctioned entities”【1】.

Shipbrokers submit daily assessments to the Baltic Exchange, which then publishes the TD3C figure that underpins a multibillion‑dollar derivatives market【2】. Mercuria’s claim asks the court to force the Exchange either to suspend the index or to base it on alternative routes, such as from Oman or West Africa to China, for both current and past periods【1】. The Exchange’s own consultation showed 55 % of respondents opposed any change, citing a desire for continuity and stability【1】.

The lawsuit highlights how a handful of historic London entities shape pricing for global commodity flows, echoing earlier legal battles over the London Metal Exchange’s handling of nickel contracts in 2022【1】. If Mercuria succeeds, the case could force a reassessment of benchmark governance during geopolitical shocks, potentially reshaping how freight rates are set when traditional routes become untenable.

The outcome will test whether market participants can rely on long‑standing indices amid conflict‑driven disruptions, or whether new, more flexible pricing mechanisms will emerge to protect traders from similar volatility.