Is there another case of "insider trading" in the crude oil market? $1.7 billion in trades placed an hour early betting on easing tensions in Iran

Ask AI · Why does precise trading timing trigger insider-suspicion?

Before media reports about easing US–Iran tensions were published, the US crude oil futures market saw massive abnormal trades. This multi-billion-dollar early bet has once again raised concerns in the market about illegal trading that may be based on access to inside geopolitical information.

On Wednesday evening Beijing time, within about one hour before what Wall Street Insights mentioned—namely, that the US and Iran were nearing an agreement on a ceasefire memorandum—around 17,300 lots, totaling more than $1.7 billion, of West Texas Intermediate (WTI) near-month futures contracts suddenly changed hands. Driven by expectations that the situation would ease, WTI crude oil futures plunged $7.19 on the day, a drop of 7%, closing at $95.08 per barrel, while US stock markets rose as the conflict was expected to end permanently.

Several energy market experts said the timing of this front-running trade was highly abnormal and appeared to indicate advance knowledge of the content of media reports. Analysts warn that these kinds of suspicious trading patterns—amid a recent surge in major geopolitical news—are further eroding investors’ confidence in market fairness.

The incident has already prompted direct intervention by US lawmakers and scrutiny from regulators. On Wednesday, Massachusetts Senator Elizabeth Warren publicly questioned whether such behavior may involve insider trading, and, according to an earlier Bloomberg report, the US Commodity Futures Trading Commission (CFTC) is also investigating related suspicious trading patterns.

Massive trades “precisely front-ran”

Abnormal market swings occurred precisely before a major news release. According to Dow Jones Market Data, around 4:50 a.m. Eastern Time on Wednesday, Axios cited information from US officials saying the White House believed the US and Iran were close to reaching an agreement on a one-page memorandum to end the conflict and set a framework for future nuclear negotiations. Previously, President Trump had repeatedly stated that the US and Israel decided to attack Iran at the end of February, with the aim of ensuring Iran would never be able to develop nuclear weapons.

However, about an hour before the report was published, trading volume in WTI near-month futures suddenly surged. The vast majority of the trades were completed before 4:10 a.m. Eastern Time. When Axios’s report eventually appeared in news outlets, oil trading volume surged again.

Experts question illegal trading patterns

In response to this rare surge in trading volume, multiple industry insiders told media that this is clearly someone trading in advance while having access to insider information. For the above allegations, Axios and the White House have not responded to requests for comment.

Gregory Brew, a senior analyst at Eurasia Group who focuses on energy markets and Iran issues, said that trading volume in the early morning Eastern Time is usually quite sluggish. He added that the oil trading activity on Wednesday morning looked extremely unusual and suspicious.

Ilia Bouchouev, former president of Koch Global Partners and a well-known energy trading expert, agreed. He pointed out that although Wednesday’s trading took place during London’s early trading hours—somewhat less active than prior trading during non-active periods—the “pattern of unlawful conduct is clearly continuing.”

Two senior energy traders, who requested anonymity, also said these activities are enough to undermine people’s confidence in the market. However, they added that it is difficult in practice to determine exactly who made these trades and whether they were entirely inspired by insider information.

Historical abnormal trades prompt regulatory scrutiny

Since the outbreak of the Iran conflict, there have been multiple suspected insider-trading incidents in both oil futures markets and prediction markets that appear to have nailed the timing.

According to media reports, on April 7—just before President Trump announced a temporary ceasefire agreement with Iran—traders placed a bet of $950 million to short oil prices. About a week later, about 20 minutes before Iran announced that the Strait of Hormuz would remain open to commercial shipping, another suspicious oil trade worth $760 million appeared in the market. Since the conflict began, tanker traffic through the strait has been severely constrained. MarketWatch also reported in March that there were allegations of insider trading in prediction markets related to the conflict.

This repeated pattern of precise bets has alarmed members of the US Congress. On Wednesday, Senator Elizabeth Warren posted links to media reports on the social platform X that highlighted some of these cases last month, and she said directly:

“Is this just luck? In my view, this is insider trading.”

Regulators have also taken action. The CFTC is investigating suspicious oil market trading patterns connected to Truth Social posts with market impact and related media reports. A CFTC representative told MarketWatch on Wednesday that the agency would not confirm or deny whether it is conducting an investigation.