A massive short position executed just 20 minutes before a major announcement has once again brought mysterious trading activity in the crude oil market into the spotlight.
On April 17, approximately 20 minutes before Iran's foreign minister announced the full opening of the Strait of Hormuz to all commercial vessels, a short position in crude oil valued at around $760 million was placed. Following the announcement, oil prices fell by as much as 11% during the day. According to Reuters, this marks the third instance in recent months where significant short positions were established just prior to major policy announcements affecting oil markets.
The U.S. Commodity Futures Trading Commission has launched an investigation into the matter. A source familiar with the situation indicated that the CFTC is examining a series of oil futures trades, including two other transactions on March 23 and April 7, which also occurred shortly before major policy statements related to U.S.-Iran tensions were made public.
The trade involved the sale of 7,990 Brent crude futures contracts within a single minute, between 12:24 and 12:25 GMT, with a total value of approximately $760 million based on prevailing prices.
At 12:45 GMT, Iran's foreign minister posted on the social media platform X that the Strait of Hormuz would be "fully open" to all commercial shipping for the remainder of a ceasefire period, using wording consistent with a Lebanon ceasefire agreement. Within minutes of the post, the day's decline in oil prices widened to 11%. The timing between the short trade and the public announcement was a mere 20 minutes.
This event is not isolated. Previous reports noted two other similar trades: On April 7, about $950 million in crude short positions were established hours before the U.S. and Iran announced a two-week ceasefire. On March 23, investors sold roughly $500 million in oil futures about 15 minutes before an announcement that a planned U.S. strike on Iranian energy infrastructure would be postponed, after which oil prices fell 15%.
Combined, these three trades represent over $22 billion in market activity, each executed in a narrow window just before major policy disclosures. The highly consistent timing pattern is a central reason regulators have taken notice.
The precise timing of these trades has raised significant concern among U.S. lawmakers and legal experts, who worry that information asymmetry regarding war and diplomatic decisions is being exploited by certain traders for gain in derivatives markets.
A source indicated that the CFTC has formally opened an investigation into the series of trades, focusing particularly on the transactions from March 23 and April 7. Experts note that the inherent opacity of war and diplomatic policymaking presents serious challenges to market fairness if such information is accessed by select participants before it becomes public.
The CFTC has not yet publicly disclosed details of the investigation, and the identities of the traders involved remain unconfirmed.