5 | Dire Straits for Freight Derivatives

The closure of the Strait of Hormuz in March reduced approximately 20% of global oil and LNG exports to a trickle. Oil prices, transport costs and related premiums surged. The fallout and potential for claims across the insurance, commodities, shipping and related derivatives markets is extensive.

In one such example, on 30 April 2026, Mercuria Energy Trading commenced proceedings against Baltic Exchange Information Services Limited regarding its setting of the widely-used ‘TD3C’ benchmark rate1 following the closure of the Strait. Mercuria alleges that Baltic Exchange breached its statutory duties under Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 (the Benchmarks Regulation) and contractual duties under Mercuria’s service contract through the rate-setting methodology it applied, when no actual transaction prices were available during the Strait’s closure. The claim has been granted an expedited 15-day trial starting at the end of October 2026. The outcome could have potentially wide-ranging implications for claims across the freight options, forwards and derivative markets.