The Price Keepers: The World of Commodity Benchmarks and Price Reporting Authorities (Part 1)

Overview

Every time you fill your car with gasoline, book a flight, or purchase a product made of plastic, the final price you pay is influenced by a number. This number is not set by a government, a stock exchange, or the company you are buying from. This is where Price Reporting Agencies (PRAs) step in. PRAs are specialist firms that gather and publish commodity price benchmarks, essentially acting as the “official” price-setters for raw materials ranging from crude oil to corn. They operate largely behind the scenes, and while entire supply chains rely on their benchmarks daily. Even industry professionals who depend on PRA prices can be hazy on how these agencies work.

In this deep dive, we will explore the major commodity markets PRAs serve, how benchmarks function, the business model of PRAs, the origins of this niche industry, and why their role is so critical.

This article, the first in a multi-part series, will explore who the PRAs are, how their industry was forged by historical crises, and the critical function they perform in bringing transparency to the world's most essential markets. We will introduce the dominant players and demystify the process they use to set the price for the raw materials that fuel, feed, and build our world.

The Unseen Engine of Global Trade: What is a Price Reporting Agency?

At its core, a Price Reporting Agency is an independent, privately-owned publisher and information provider whose primary function is to assess and report the price of physical commodities. PRAs are not exchanges, they do not operate trading platforms, and they are not brokers facilitating deals.

They are, in essence, journalistic enterprises that survey a wide range of market participants, including producers, consumers, traders, and brokers, to determine what they assess to be the "fair value" of a commodity at a specific location and point in time. Their stated goal is to provide accurate, impartial market intelligence, which in turn promotes fair competition and enhances efficiency in markets that would otherwise be opaque and difficult to navigate.  

The Markets They Serve

Modern PRAs cover almost every commodity market imaginable;

• Energy: This is the largest and most influential segment. PRAs assess prices for hundreds of grades of crude oil, refined products like gasoline, diesel, and jet fuel, as well as natural gas, Liquefied Natural Gas (LNG), coal, electricity, biofuels, and carbon emissions credits.  

• Petrochemicals: PRAs provide benchmark prices for the fundamental building blocks of the modern industrial economy, such as ethylene, propylene, and benzene, which are used to make plastics, resins, and synthetic fibres.  

• Metals: Coverage spans the entire metals complex, from base metals like copper and aluminium to speciality metals, rare earths, ferro-alloys used in steelmaking, and scrap metal.  

• Agriculture: PRAs assess prices for staple food crops, animal feed, and key agricultural inputs. This includes grains, oilseeds, and fertilisers, with some agencies now expanding into niche markets like organic and non-GMO commodities.  

Who Are the Price Reporting Agencies and What Markets Do They Command?

Introducing the "Big Three"

Wherever buyers and sellers trade physical commodities, PRAs provide price assessments to bring transparency and consistency. Dozens of PRAs exist (over 100 globally), but three names dominate the landscape. Their names are ubiquitous within the trading houses and corporate procurement departments that rely on them, and their benchmarks form the bedrock of physical and financial commodity contracts worldwide.  

• S&P Global Commodity Insights (Platts): The historical titan and undisputed market leader, especially in the global oil markets. Founded in 1909, its influence is so profound that in many trading circles, "Platts" is used as a synonym for the price itself. Now a division of data giant S&P Global, it is estimated to generate around $1 billion in annual revenue, accounting for a substantial share of the entire PRA market.  

• Argus Media: Platts' primary global competitor, Argus was founded in 1970 and has grown to become a formidable force across energy and other commodity markets. It is known for being the first PRA to apply the International Organization of Securities Commissions (IOSCO) Principles for Oil Price Reporting Agencies to its energy benchmarks, a key move to bolster transparency and trust. A privately held company, a majority stake was sold to private equity firm General Atlantic in 2016 in a deal that valued Argus at nearly $1.4 billion, a figure that has likely grown significantly since.  

• ICIS (Independent Commodity Intelligence Services): A key player with dominant positions in petrochemicals and European natural gas markets. Founded in 1980, ICIS is now part of RELX, a global provider of information-based analytics and decision tools, which also owns LexisNexis.  

These “big three” PRAs are complemented by other notable agencies like OPIS (Oil Price Information Service, U.S.-based, focused on fuel prices), Fastmarkets (covering metals, mining, forest products, etc.), and numerous niche players. However, Platts, Argus, and ICIS remain the core trio in setting global commodity price references. Together, PRAs publish an astonishing array of price assessments - over 100,000 individual prices each week across various markets. These benchmarks have become the lifeblood of commodity trading, ensuring that all market participants reference a common pricing standard.

A Brief History of Price Discovery

The need to record and standardise the value of goods is as old as commerce itself. The world’s first futures contracts can be traced to ancient Sumer, where clay tablets recorded future deliveries of barley. This ancient impulse for a shared, trusted record of value is the same one that drives the multi-billion-dollar PRA industry today.

The Dawn of Modern Price Reporting - John Newbery & The Public Ledger

The direct ancestor of the modern PRA is The Public Ledger, founded in London in 1760. Initially a general newspaper, it evolved to specialise in reporting agricultural commodity prices, establishing the foundational model of a journalistic enterprise providing price transparency to a specific market. Its precursor was the London-based Lloyd's List (1734), which reported shipping and commodity prices for coffee, sugar, and spices. This evolved from coffeehouse bulletins in the 1600s, where merchants shared price info informally, highlighting PRAs' journalistic lineage tied to colonial trade routes.

However, the modern PRA industry, particularly in the all-important oil sector, was truly born from the vision of two entrepreneurial journalists who recognised that in a chaotic market, information was the most valuable commodity of all.

The Pioneers of Oil Reporting - Warren C. Platt & Jan Nasmyth

The modern PRA industry was effectively born from the entrepreneurial vision of one man: Warren C. Platt.

A journalist by trade, Platt recognised a pivotal market opportunity in the early 20th century. The U.S. government's 1911 breakup of John D. Rockefeller's Standard Oil monopoly had shattered a centralised pricing structure, creating a fragmented landscape of new, independent oil companies. These companies were suddenly operating in a market without a clear price leader and were desperate for reliable information to conduct business.

In 1909, Platt borrowed $2,500 to launch his own publication, National Petroleum News. His focus was not just on providing information, but on providing it with accuracy and speed, a core DNA that continues to drive the industry more than a century later. In 1923, he expanded his venture with a newsletter called Platts Oilgram, which quickly became the recognised and influential source for petroleum prices. Platt's company was eventually acquired by the McGraw-Hill group in 1953, forming the bedrock of the organisation that would evolve into the global behemoth S&P Global Platts. Over time, the name “Platts” would become synonymous with oil price benchmarks. Platts demonstrated that impartial commodity price reporting could be a viable business.

Decades later, another journalist, Jan Nasmyth, followed a similar path. A former UK government official and Reuters journalist, Nasmyth believed that neither the big oil companies (the "Seven Sisters") nor OPEC could be trusted to report the real market price. In 1970, he launched a weekly newsletter from London called Europ-Oil Prices, which would later become Argus Media. His goal was to shine a light on the actual going rates for oil being traded, independent of the official prices set by producers.

The 1973 Oil Embargo and its forging of the Modern PRA Industry

For a time, these publications served a niche audience. But a global crisis would soon make them indispensable.

Prior to the 1973 Oil Shock, global oil prices were largely administered by a cartel of major oil companies known as the "Seven Sisters" and later by the governments of the Organization of the Petroleum Exporting Countries (OPEC). The 1973 oil embargo, imposed by Arab members of OPEC against the United States and its allies, disrupted this controlled system. The embargo and associated production cuts caused prices to nearly quadruple in a matter of months, from around $2.90 to $11.65 a barrel. This event shifted the locus of pricing power away from long-term, producer-set contracts and into a volatile, opaque, and nascent "spot market", where cargoes were traded for immediate delivery.

This chaotic new environment created an urgent, global demand for an independent, trusted third party that could survey this murky market and report a credible daily price. This was the moment that made PRAs like Platts and the recently founded Argus Media essential cogs in the global energy machine. Nasmyth’s instinct was that neither the oil companies nor OPEC, which both tried to control prices, could fully dictate the market - an independent reporter of actual trades could shine a light on the real going rates.

The Power of Precedent: Why Benchmarks Rarely Switch

One interesting historical note is the continuity of certain benchmarks over time. Very few major benchmarks have ever “changed hands” between agencies. In other words, once the industry settles on a PRA’s version of a price, that benchmark tends to stick with that PRA for decades. For example, Platts has long published the key Brent Crude oil assessments and remains the principal source for that benchmark; Argus, for its part, became the main publisher of Russian Urals crude prices and many U.S. Gulf Coast oil grades.

It’s rare for an entire market to decide to switch an established benchmark from one PRA to another - though it has happened in notable cases when the incumbent price was seen as broken.

A prime example was in 2009, when Saudi Arabia and other OPEC members, unhappy with the landlocked WTI crude benchmark (a Platts price) as a marker for global oil, switched to using the Argus Sour Crude Index (ASCI) for pricing their sales to the US. This was a seismic shift in the oil pricing world, driven by the fact that WTI prices had become disconnected from coastal oil markets, whereas Argus’s index better reflected true values.

Another example came in some refined fuels and regional markets where industry groups moved from one PRA’s price to a competitor’s because of methodology differences. These changes, however, are few and far between, considering the thousands of benchmarks in existence. They usually require a consensus among big buyers and sellers that something is wrong with the current price reference. Overall, the network effect and trust in established benchmarks make it difficult to dislodge an incumbent PRA - which is why new entrants face an uphill battle.

The Art and Science of a Price: How Benchmarks Are Made

Commodity benchmarks are standardised reference prices for specific grades or categories of a commodity. They address a fundamental challenge: physical commodities can vary widely in quality, specifications, and location. For instance, crude oil can be light or heavy, sweet (low sulfur) or sour (high sulfur); coal varies by energy content; wheat has different protein grades. Rather than pricing every cargo or batch in isolation, the market gravitates to benchmark grades - like North Sea Brent crude oil, WTI crude, Gold 99.5% purity, or US Midwest Premium steel - that serve as the baseline.

The Solution: The Benchmark

To solve this problem, the market relies on the concept of a benchmark. A benchmark is a standard, clearly defined reference point against which all other variations of a commodity can be priced. It creates a common language for commerce. Linking transactions to a benchmark helps manage volatility and price differences stemming from quality or regional variations. For example, instead of a protracted negotiation over the absolute price of a specific shipment of jet fuel arriving at a terminal in Singapore, the buyer and seller can agree to a much simpler price formula: the PRA's published benchmark price for Singapore jet fuel on a given day, plus or minus a negotiated differential (e.g., +$0.50 per barrel) that accounts for any minor differences in their specific deal's quality or terms. This system dramatically simplifies trade, reduces information asymmetry, and provides a trusted, neutral baseline for negotiations.

This was one of the original goals of PRAs: to level the information playing field so that smaller players have access to the same market pricing data as large, dominant firms. As we'll see in the historical section, this transparency angle was vital in breaking the information monopoly of giants like Standard Oil in the early 20th century.

How a Benchmark is 'Set': A Look inside the 'Window'

PRAs are the ones who determine and publish these benchmark prices on a daily or weekly basis. They do so by collecting data on trades, bids/offers, and market information from a network of industry participants. The process is often a blend of data collection and expert judgment:

• Market reporters at the PRA actively survey traders, brokers, producers, and consumers for deals done and price quotes in the market each day.

• They follow strict methodologies that define what transactions are considered in the “price assessment window". For example, deals for a standard volume, quality, and delivery timeframe, executed before a cutoff time.

• Using those inputs (and sometimes their own analysis of market fundamentals), the PRA determines the day's assessment, essentially the price that best reflects the value of the commodity in that market for that period. Many benchmarks are published daily, others weekly, depending on market activity.

The creation of a benchmark is not a purely mathematical calculation; it can be a journalistic assessment process. The most famous and scrutinised of these is the "Market-on-Close" (MOC) methodology, pioneered by Platts and used in various forms by other PRAs. By providing a trusted benchmark, PRAs essentially set the market’s reference price. For instance, if Brent crude oil is assessed at $80/barrel today by Platts, a refinery in Asia might buy a cargo of a similar crude at “Brent + $2” (if that crude is higher quality) – thus paying $82 based on the benchmark. Thousands of physical and derivative contracts settle against these published prices. In this way, benchmarks anchor transactions and even help create financial instruments (swaps, futures) that use the PRA price as the underlying value.

Example: Dated Brent Oil

• Defining the "Window": The PRA establishes a specific, transparent timeframe, typically a 30-minute window at the end of the trading day (e.g., 16:00 to 16:30 London time), during which it will consider market activity for its end-of-day assessment. Activity outside this window may inform the reporters' understanding, but will not directly form the basis of the final price.  

• Gathering Data: During this MOC window, a team of specialist PRA reporters actively gathers data. Approved and vetted market participants (traders, producers, refiners, etc.) submit firm bids to buy, offers to sell, and details of confirmed transactions to the reporters. This communication happens through a variety of channels, including instant messenger, telephone, and, in Platts' case, a proprietary platform called the "eWindow".  

• Applying Judgment and Verification: This is where the "art" of price reporting comes in. The reporters do not simply average the numbers they receive. They act as filters, applying a strict, published methodology and their own expert judgment to the data. They assess the credibility of the information, confirm the details of transactions, and ensure that the activity is representative of repeatable, arm's-length market value. They have the discretion to exclude any data—bids, offers, or trades—that they deem to be anomalous, out of line with the broader market, or not bona fide. In illiquid markets where few trades occur, this judgment is even more critical, as reporters may need to assess value based on spreads to more active, related markets.  

• Publication: At the exact close of the window, the PRA publishes its official price assessment. This number becomes the benchmark for that commodity, for that day, and is immediately disseminated to subscribers worldwide.

This intensive process is repeated across thousands of different commodity markets every single day. The scale is immense: the major PRAs collectively publish well over 100,000 individual price assessments each week. S&P Global Commodity Insights alone publishes over 12,000 prices daily, while Argus publishes more than 40,000 energy and commodity prices, and Fastmarkets provides over 5,500.  

Handling Aggressive pushing

A critical question arises from this methodology: what prevents a small number of powerful players from aggressively bidding a price up or offering it down within the MOC window to influence the final benchmark for their own benefit? This is a central challenge and a source of significant regulatory scrutiny. PRAs assert that their methodologies and the expert judgment of their reporters are designed to detect and disregard such manipulative behaviour. If a bid or offer is deemed unrepresentative of the repeatable market value, it can be excluded from the assessment process.  

However, this reliance on human discretion is a double-edged sword. It provides a crucial layer of intelligent oversight that a pure algorithm might lack, but it also introduces subjectivity. Regulators have investigated cases where market participants have attempted to manipulate a benchmark by reporting false trades or colluding to prevent others from participating in the MOC process. To date, these investigations have focused on the behaviour of the market participants submitting the data, and there has been no evidence that the PRAs themselves have colluded in market abuse. Nonetheless, the integrity of the process hinges on the PRA's ability to remain an impartial and discerning judge of the data it receives.  

This distinction highlights a fundamental truth: a PRA benchmark is not a price in the same way an exchange-traded price is. An exchange price is the objective, machine-driven result of a central limit order book. A PRA benchmark is a journalistic assessment of value, synthesised from disparate, voluntarily submitted data points. This makes the PRA's methodology, its governance, and the integrity of its reporters the absolute cornerstones of its franchise.  

This process also gives rise to one of the most powerful economic moats in modern finance: the "stickiness" of benchmarks. Once a benchmark like Platts Dated Brent becomes embedded in the market, the costs of switching to an alternative are astronomical. A large airline, for instance, may have hundreds of long-term fuel supply contracts, all containing pricing formulas that explicitly reference a specific PRA's benchmark. Its financial hedging program, using futures and swaps, is designed to manage risk against that same benchmark. Its internal accounting, risk management (Value-at-Risk), and transfer pricing systems are all calibrated to that benchmark's data. To switch to a new benchmark would require renegotiating every contract, re-aligning every hedge, and overhauling every internal system - a project of immense cost, complexity, and operational risk. This inertia is why benchmarks so rarely "change hands" and why historical shifts have only been prompted by profound, structural changes in the underlying physical market, such as the production of a benchmark grade of crude oil declining to the point of irrelevance.  

Conclusion: The Unseen Foundation of Modern Markets