Oil trading spike minutes before post by Trump raises questions

Traders placed $500 million worth of bets on price crashing on Monday, which it did

LONDON – Traders bet half a billion dollars on the ‌price of crude only 15 minutes before US President Donald Trump announced a five-day delay to attacks on Iranian energy infrastructure that sent the market plunging, exchange data and Reuters calculations show.

Having issued Iran with a Monday deadline to reopen the critical Strait of Hormuz or face its power plants being “obliterated”, Trump’s post on ​Truth Social at 1105 GMT ⁠on Monday unleashed a powerful selloff in oil and natural gas contracts.

The benchmark Brent crude contract fell as much as 15% in a matter of minutes as Trump indicated “constructive” talks between Washington and Tehran were ongoing. That prompted investors to price in the possibility of a ‌de-escalation that could unblock the millions of barrels of oil now choked off in the Gulf.

Data compiled by LSEG (London Stock Exchange Group) shows that between 1049 and 1050 GMT, traders placed bets on 5,100 lots of Brent and West Texas Intermediate (WTI) crude futures, worth well over $500 million, based on a Reuters calculation.

The data ⁠also shows that, in the minute in which those contracts changed hands, it was selling that dominated volumes. It was not possible to establish who traded the oil.

The roughly 2,000-lot spike in volume in Brent futures at that point was far larger than those logged earlier in the day. But turnover was dwarfed by what followed ​when Trump posted.

13 million barrels in 60 seconds

Over 13,000 lots of Brent and WTI crude futures, equivalent to 13 million barrels of oil, changed hands in the space of 60 seconds at 1105 GMT.

Brent crashed to around $99 a barrel ​from $112 ‌before the pre-announcement trades took place, while WTI fell to $86 from closer to $99 prior to Trump’s post.

The Intercontinental Exchange, on which Brent crude is traded, and CME Group, which owns the NYMEX exchange on which WTI ​trades, ⁠did not immediately respond to Reuters’ requests for comment.

The US Securities and Exchange Commission declined to comment. The White House also did not respond to a request for comment. The Commodity Futures ⁠Trading Commission was not immediately available for comment.

With around one-fifth of the world’s daily oil supply cut off by the Middle East war, prices are still more than 40% higher than they were when the conflict erupted in late February.

Trading volumes ⁠and volatility have exploded. On average, in the three years leading up to the war, about ​300,000 lots of Brent crude futures would change hands on a daily basis.

That amount has doubled in the last four weeks as daily volumes have hit record highs above 1 million lots, equal to a billion barrels of oil.

For now, the Brent oil price is just below $104 as uncertainty persists over ‌the total hit to the ⁠global economy — and even over the status of negotiations, as ​Iran denied it was engaged in discussions with the US.