‘Nonsense Rate’: Iran War Exposes Turmoil Behind Key Tanker Benchmark

By Jack Farchy and Alex Longley (Bloomberg) — In March this year, inside a 282-year-old institution responsible for one of the most important prices in global oil markets, one man staged a quiet protest.

“Nonsense rate,” Christopher Loveday wrote on March 23 in an internal document at the Baltic Exchange, where he was responsible for helping produce the world’s benchmark rate for shipping oil. “Still a nonsense,” he wrote two days later. On March 31, as he filled in his section of the spreadsheet that sets the price of a benchmark underpinning billions of dollars in freight derivatives trading, he wrote: “b/s rate.”

The comments are among numerous internal communications, emails and calls that have become public in filings and court testimony during a legal battle playing out in London between the Baltic and oil trader Mercuria Energy Group. Collectively, they offer unprecedented insight into how the war in Iran played out inside a key corner of the global oil market.

In particular, the case has provided a fly-on-the-wall perspective on events inside the Baltic, which for centuries has been at the heart of the global shipping industry.

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