Hundreds of millions of dollars were wagered on oil markets minutes before Donald Trump announced a delay to US strikes on Iran.
Spike in oil trades has prompted scrutiny about insider trading
Trading data shows a sharp spike in activity shortly before the US president posted on social media that Washington would postpone action against Iranian energy infrastructure following talks with Tehran. The price of oil then fell by 14% within minutes, allowing traders who bet on the drop to make significant profits.
Market analysts say the timing of the trades has raised questions about whether some investors had prior knowledge of the announcement.
Data reviewed shows that at 06:49 Eastern Time, 734 bets were placed on US crude oil contracts, rising to 2,168 within a minute - equivalent to around $170m. Similar spikes were recorded in Brent crude, with trades jumping from 20 to more than 1,650 in just two minutes.
Mukesh Sahdev, chief oil analyst at XAnalysts, said: “This appears abnormal, for sure. At that time, there were no indications that any serious talks had been taking place between the US and Iran. So to place so much money on oil going down raises questions”.
Rachel Winter, a partner at Killik Co, said the activity had fuelled speculation about insider trading. She said: “Just before he posted on social media, quite a lot of people took out contracts that would allow them to profit from the oil price falling. So there has been some speculation about insider trading. We don't know if that's true, but hopefully there will be some sort of investigation into that”.
The White House explained it did not “tolerate any administration official illegally profiteering off of insider knowledge”.
Regulators including the Commodity Futures Trading Commission have not commented.
The trades came amid wider volatility linked to the Middle East conflict. Oil prices later rose again after Iran denied any talks had taken place, calling the reports “fake news”.
Tagged in Donald Trump