The oil market has worrying echoes of the Libor scandal

THE oil trader had a crystal-clear order to his lieutenant: “Make sure you start talking the (market) down.” He did that, and a lot more, submitting “false and misleading” bids and offers to manipulate a key US oil benchmark, making millions in profits. The Glencore traders rigged US fuel-oil prices for nearly five years before they were caught, according to a plea agreement between the company and the US Department of Justice.

It wasn’t the only malfeasance engulfing that particular benchmark. In the past four years, the Commodity Futures Trading Commission has fined all of the top three oil trading houses for either successfully manipulating the fuel-oil market or, at the very least, trying to influence pricing via elaborate schemes. The US regulator slapped fines on Vitol Group in 2020; in 2022, it did the same to Glencore; and only last week, it fined Trafigura Group too.

Three major scandals in relatively quick succession, along similar lines and involving the industry’s biggest players, suggest the misconduct can’t be brushed aside as one-offs; instead, they indicate a systemic problem that regulators should address. Something is rotten in the market.