Oil trades worth $7 billion were reportedly made before Trump Iran announcements
Investing.com -- Market participants placed trades worth up to $7 billion betting on falling oil prices during March and April, executing the positions across multiple exchanges just before U.S. President Donald Trump made major policy announcements regarding Iran.
The figure surpasses earlier reports of $2.6 billion in trades that already led the U.S. administration to warn staff against using nonpublic information for financial gain, Reuters reported on Thursday citing traders, market experts and exchange data. The DOJ, along with the Commodity Futures Trading Commission, is probing at least four of these trades where traders made a total of more than $2.6 billion betting that oil prices would drop right before they did, according to media reports.
The identity of those who placed the trades and their location remain unknown. The positions included short bets on derivatives such as ICE and CME crude, diesel and gasoline futures.
The trades occurred on the Intercontinental Exchange and Chicago Mercantile Exchange, both of which host benchmark global oil and fuel futures. Neither exchange provided comment. CME is conducting its own investigation into the trades, Reuters reported.
Legal experts and lawmakers have called for regulatory investigations to determine whether the trades relied on inside information or leaks.
Unusual trading activity first appeared on March 23, with trades executed minutes before Trump announced a delay to threatened attacks on Iranian power infrastructure. Oil prices fell following the announcement, the report said.
The pattern repeated on April 7, before Trump announced a ceasefire with Iran that caused benchmark ICE Brent futures to drop as much as 15%. Similar activity occurred on April 17, when Iranian officials and Trump discussed reopening the Strait of Hormuz, and again on April 21, when Trump extended the ceasefire.