Mercuria challenging the ‘Dow Jones of shipping’ in court after Hormuz losses
Case will test the Baltic Exchange’s decision to keep publishing price estimates for shipping oil through the Strait of Hormuz during the war
One of the world’s largest commodity trading houses is suing a 282-year-old shipping institution over whether it should have continued to publish benchmark freight rates for ships sailing through the Strait of Hormuz after war broke out this year.
Mercuria has brought the case against the Baltic Exchange, which will be heard from Monday in the English High Court. It will argue Baltic should have suspended the index used to price journeys on its flagship tanker route through the Strait of Hormuz after the US and Israel launched strikes on Iran in February.
The Baltic, described by one shipping executive as the “Dow Jones of shipping”, publishes rates that dictate freight costs for commodities in a market that is difficult to price and famously opaque. Contracts are negotiated privately, vessels and routes differ, and transactions may be infrequent.
The Baltic’s rates are used by commodities traders to price derivatives worth billions of dollars that hedge their risks.
“The Baltic became one of the great institutions of shipping because it is the only place you could go to on a daily basis that would give you, across the most common cargoes on the most common routes, the daily price for shipping,” said Mark Williams, chief executive of trade association Maritime London, who added that the various Baltic indices were not an “actual price but what the brokers think the rate on that day would be”.
Traders, brokers and industry executives see Mercuria’s challenge as a critical test of the Baltic and whether its system of assessing rates still works as shipping is targeted in ongoing conflicts.
“The Baltic has to be on its toes and make sure whatever information it uses is correct. Lately, with all the geopolitical issues we have had, especially around tanker transportation, they were behind the curve,” said Philippe van den Abeele, founder of Consortium Maritime Trading and a member of the Baltic Exchange since 1981.
Platts, seen widely as the Baltic’s main competitor, suspended its own rating process for oil grades shipped through Hormuz two days after the war began.
Mercuria originally claimed that it had lost “hundreds of millions” of dollars over the Baltic’s decision not to suspend the benchmark known as “TD3C”, which tracks the daily cost of transporting 270,000 metric tonnes of crude oil from the Middle East Gulf to China.
It said in its claim, seen by the FT, that the benchmark should have been paused after a steep decline in shipping traffic through the strait and Iran’s claims that it was “closed”.
The trader is not seeking damages but “declaratory relief” that would require the Baltic to suspend the TD3C benchmark and render publications of the rate since early March invalid. It has since amended its claim to remove any reference to financial losses.
People close to Mercuria said the claim was about transparency rather than cost, adding that the trader had never sought damages and instead was seeking declarations that the Baltic had breached statutory and contractual duties and that determinations since early March 2026 were invalid.
The Baltic has responded in its defence that it is not unusual for a route to have “little or no activity for a period of time” and that some ships were still passing through the waterway carrying oil.
It also said that it relied upon “highly experienced and knowledgeable” shipbrokers who had continued to provide rates.
If Mercuria is successful, the Baltic’s lawyers have said it would have “chaotic marketwide consequences”.
People close to the Baltic warned that hundreds of trades might have to be unwound.
“It’s a mess,” said one shipbroker. “Mercuria were on the wrong side of some trades but they might have a point.”
At the same time, pricing from the Baltic has become increasingly important as freight rates make up a growing proportion of a commodity’s cost. The price of shipping a barrel of oil is as much as five times what it was last year in some cases, according to the International Energy Agency, adding to the cost for consumers.
For some traders and shipping industry players, TD3C has become an unreliable benchmark. Only a handful of ships have risked running the gauntlet through the Strait of Hormuz, many of them chartered by Gulf national oil companies willing to pay a high price to export their oil.
The Baltic launched a new benchmark called TD34 this month, which tracks cargoes from Fujairah, outside the Gulf, to China.
“Our main concern right now is continuity going forward. If this is the structure . . . we can’t rely on the Baltic and its procedures to hedge physical exposures,” said one industry executive.
“They should not produce prices on trades that are in the middle of a war zone. It contravenes basic benchmarking principles,” said van den Abeele.
Mark Jackson, the Baltic’s chief executive, said it was “confident that it has met and continues to meet all its statutory, contractual and regulatory obligations in the production of the TD3C benchmark” and that the Baltic “believes the claim from Mercuria is without merit and will defend it to the fullest extent”.