A massive short sale executed just 20 minutes before a major announcement has once again raised suspicions of irregular trading in the crude oil market. On April 17, approximately 20 minutes before Iran's foreign minister declared the Strait of Hormuz fully open to all commercial vessels, a short position worth around $760 million was placed in crude oil. Following the announcement, oil prices plummeted by as much as 11% that day. According to Reuters, this marks the third such incident in recent months where significant short positions were established just ahead of major policy announcements.
The U.S. Commodity Futures Trading Commission (CFTC) has launched an investigation into the matter. A source familiar with the situation revealed that the CFTC is examining a series of oil futures trades, including transactions on March 23 and April 7, both of which occurred shortly before former President Trump made significant statements regarding Iran-related military policies.
Within a single minute between 12:24 and 12:25 Greenwich Mean Time on April 17, investors sold a total of 7,990 Brent crude futures contracts, equivalent to roughly $760 million at prevailing prices, data from the London Stock Exchange Group (LSEG) showed. At 12:45 GMT, Iran's foreign minister posted on social media platform X that the Strait of Hormutz would be "fully open" to all commercial vessels during the remainder of the ceasefire period, using wording consistent with the Lebanon ceasefire agreement. Within minutes of the announcement, oil prices extended their decline, reaching an intraday drop of up to 11%. The timing gap between the short sale and the public statement was merely 20 minutes.
This is not an isolated occurrence. Reuters previously reported two similar trades in recent weeks: On April 7, approximately $950 million in crude oil short positions were established hours before the U.S. and Iran announced a two-week ceasefire agreement. On March 23, investors sold around $500 million in oil futures just 15 minutes before Trump announced a delay in attacks on Iranian energy infrastructure, after which oil prices fell by 15%. Combined, these three trades exceeded $22 billion in value and were all executed within an extremely narrow window preceding major policy disclosures. This highly consistent timing pattern has drawn regulatory scrutiny.
The precision of these trades has raised concerns among U.S. lawmakers and legal experts, who fear that information asymmetry in war and diplomatic decision-making is being exploited by certain traders for profit in derivatives markets. A source told Reuters that the CFTC has formally opened an investigation into the series of trades, focusing particularly on the March 23 and April 7 transactions. Experts and lawmakers emphasize that the inherent opacity of military and diplomatic decisions poses serious challenges to market fairness if such information is accessed by select participants before it becomes public. So far, the CFTC has not disclosed details of the investigation, and the identities of the traders involved remain unknown.