Jorge Montepeque, architect of oil-pricing system, to leave Platts

The architect of the system that underpins oil pricing around the world has announced he is leaving Platts after a shake up at the reporting agency.

Jorge Montepeque, the head of market reporting, is credited with bringing a degree of transparency to once opaque corners of the global oil trade and has fashioned a position as the de facto arbiter of a largely unregulated physical market.

A Guatemalan-born US citizen with a fiery temper and sharp tongue, Mr Montepeque helped design the so called market-on-close system, which is used by traders to set the price of millions of barrels of crude every day

Platts, a unit of McGraw Hill Financial, the US publishing group, said that after more than two decades of service Mr Montepeque had decided to leave the agency at the end of the year.

"Platts is making an organisational change within our markets reporting group . . . at this time, we see many of the functions aligning with those of our existing commodity sector heads and our new chief of content," the company said.

Last week, Platts named Martin Fraenkel, the former global head of energy at exchange operator CME Group, as its new chief content officer with a brief to develop "strategies for price assessments and analysis.

The market-on-close system was introduced by Platts in 1992 in Asia, and rolled into Europe in 2002 and the US in 2006.

In the window - a tightly controlled 30-minute period at the end of the day - authorised companies electronically submit bids and offers to Platts reporters. If those bids are met, a company has to trade. Platts is free to publish all data.

The system has faced increasing scrutiny since the global financial crisis due to concerns over the small number of deals sometimes used to establish benchmark prices that may underpin billions of dollars of oil contracts.

Attention on financial benchmarks has increased since the Libor scandal, spilling from the banking sector into the oil market.

Two years ago Europe's leading antitrust authority visited the offices of Platts as well as oil majors Royal Dutch Shell, BP and Statoil in an investigation into the setting of oil prices - the latest probe into global benchmark rates.

The European Commission said the May 2015 raids had taken place over concerns that "companies may have colluded in reporting distorted prices to a price reporting agency to manipulate the published prices".

However, supporters of the assessments say the Platts window has brought a degree of clarity and certainty to a previously opaque market. Many of the products priced by Platts are relatively niche, including petrochemicals and different diesel specifications for various regions.

"Platts and the marketplace have benefited from Jorge's insights and commitment to transparency within the energy and commodity markets. Transparency and the development of market-focused methodologies remain cornerstones of Platts' price reporting and our commitment to those is unchanged," the agency said.

As a quasi-industry regulator, Mr Montepeque has clashed many times with large oil companies and traders. The company has often penalised companies for misbehaviour, banning them from the process, something known in the industry as "boxing". Oil traders complain they cannot appeal against "boxing" as Platts is judge and jury.

In the months before the financial crisis, Platts barred both Lehman Brothers and Morgan Stanley from trading contracts on its system because of concerns about creditworthiness. Mr Montepeque also clashed with Shell and BP about what was the best way to establish the price of North Sea Brent, the international benchmark used to price around two-thirds of all oil deals

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