Whistleblowers Claimed Manipulation of Benchmark Tanker Rate TD3C

The Baltic Exchange has received two whistleblowing claims alleging attempted manipulation of TD3C, the world's benchmark oil tanker rate, since the outbreak of the war in Iran — disclosures that surfaced in documents tied to its London court battle with trading house Mercuria Energy Group.

Hearings in the case began in London this week. Mercuria argues the Baltic should have suspended the TD3C rate for the Saudi Arabia-to-China route after the war broke out. The trading house has claimed the index failed to reflect reality, but has not itself alleged manipulation — until now, that accusation belonged to unnamed others.

One of the two manipulation claims actually targeted Mercuria itself, alongside an unidentified company. The Baltic's investigation of that claim did not establish that the benchmark had been manipulated, according to the exchange's written opening arguments and a witness statement from its head of compliance. A second claim, against another unnamed company, remains under investigation, the filings showed.

Mercuria's lawyers said in written opening arguments that the firm "strongly and categorically rejects any allegation of wrongdoing," and argued the allegations were "irrelevant" to the trial.

Why the benchmark matters — and why it cracked

TD3C underpins billions of dollars in derivatives and other contracts, making it the single most important gauge of the cost of chartering oil tankers. Baltic prices come from assessments filed by panels of shipbrokers who sign up to a code of conduct built on the motto "our word our bond."

Since the Iran war began, establishing which ships are moving oil through the Strait of Hormuz, and at what price, has become far harder. Shipments through the strait plummeted after the war started, and the deals that did happen were mostly shrouded in secrecy. Brokers now parse extremely limited information. Bloomberg has reported that WhatsApp messages sent by Sinokor Group, the outfit controlled by shipping tycoon Ga-Hyun Chung, have become one of the main drivers of the price.

The economics are staggering. Middle East-to-China tanker earnings have surged from $218,000 a day before the war to $1.35 million on Thursday.

What does the Mercuria claim allege?

Going into the war, Mercuria held large short positions in TD3C-linked derivatives to hedge the earnings of its own tanker fleet, its filings show. One of its freight traders said in a witness statement that Mercuria accounted for between a quarter and a half of all open interest in TD3C derivatives.

After the US and Israel attacked Iran on Feb. 28, and Hormuz transits became nearly impossible, TD3C's price soared. Mercuria took losses on its derivatives while its tankers, unable to transit Hormuz, missed out on the surging rates.

The whistleblower email alleging manipulation by Mercuria reached the Baltic on April 24, according to a witness statement from the group's head of compliance, Abisade Aluko. It concerned a reported agreement circulated to brokers on March 17 — the charter of a tanker at 350 industry-standard Worldscale points, well below the published TD3C rate at the time.

A separate witness statement from Mercuria freight trader Renaud Hauspy showed the vessel, the Yasa Southern Cross, was hired from Mercuria by TotalEnergies SE, though he did not specify the rate. Total declined to comment.

The Baltic's freight assessor that day called the agreement "feels a bit 'strange'" — privately negotiated, with both companies holding significant derivatives positions, the Baltic's lawyers said. Two of the exchange's assessors later told Aluko they felt Mercuria and another unnamed company "were trying to manipulate the market," according to her statement.

Hauspy offered an alternative reading: the deal contained an option to load either inside the Persian Gulf at Ras Tanura or outside it at Fujairah, depending on the security situation. The ship ultimately loaded at Fujairah.

The offers that followed

From mid-March, Hauspy said, Mercuria tried to hire out vessels for voyages starting inside the Persian Gulf and found it "impossible." By mid-April, the company was firing off nearly daily unsolicited offers to every shipbroker contact, progressively lowering rates to win a booking — from 400 Worldscale points in mid-April to 300 by mid-June. Those offers sat well below the Baltic's published rates of 391 to 480 Worldscale points at the time.

In court, James McClelland, a lawyer for the Baltic, argued the April offer string began just days before Mercuria filed its claim against the pricing agency, and that a lower published rate would benefit Mercuria's index-linked positions. He added the company knew its ships could not enter the Persian Gulf anyway, since owners would not authorize a Hormuz transit.

Hauspy countered that the reasoning was purely commercial. With tanker rates surging, there was a very strong incentive to hire ships out inside the Gulf wherever possible.

With the second manipulation claim still open and the London trial underway, scrutiny of how TD3C gets priced in a Hormuz-constrained market is only set to intensify.