Kamal Ghorui
Did someone in the oil market know that US President Donald Trump is about to post an update on ‘productive talks with Iran’? Traders actually placed positions worth nearly half a billion dollars in the oil market roughly 15 minutes before Donald Trump’s social media post about “productive” talks with Iran. Minutes after the update from the US President a sharp fall in crude prices occurred and there was increased volatility across other assets.Around 6,200 futures contracts linked to Brent and West Texas Intermediate crude were traded between 6:49 a.m. and 6:50 a.m. New York time on Monday, according to a report in The Financial Times. This activity came shortly before Trump’s message on Truth Social stating that there had been “productive conversations” with Tehran in recent days aimed at ending the conflict. The total notional value of these trades was estimated at $580 million!At the same time, trading volumes in Brent and WTI surged, with a spike recorded just seconds before 6:50 a.m. Futures tied to the S&P 500 index also moved higher soon after the oil trades, with volumes rising significantly during that period.It remains unclear whether a single participant or multiple entities were responsible for the trades executed on Monday, the report said.Trump’s announcement at 7:04 a.m. led to a broad sell-off in global energy markets, while S&P 500 futures and European equities moved higher as investors reduced expectations of a prolonged Middle East conflict.Global markets have seen sharp swings amid concerns over the conflict in Iran, which started in late February. The impact has been particularly pronounced in Asian economies, which are highly vulnerable to any disruption in access to the Strait of Hormuz, a key route for energy supplies from the Middle East.In energy markets, benchmark US crude rose by $3.55 to $91.68 per barrel. Brent crude, the global benchmark, increased by $3.83 to $103.77 per barrel, reversing earlier losses recorded during the previous session on Wall Street.
‘Well-timed trades’: Not the first time!
The timing of these trades mirrors earlier instances in recent months where large and highly profitable bets were placed on prediction platform Polymarket ahead of US military actions involving Iran and Venezuela.“It’s hard to prove causality . . . but you have to wonder who would have been relatively aggressive at selling futures at that point, 15 minutes before Trump’s post,” a market strategist at a US broker told FT, referring to Monday’s trades.Market participants pointed out that this incident is among several instances in recent months where sizable trades have taken place shortly before official announcements from the US government.A trader at a leading hedge fund said energy consultants had observed multiple large block trades recently that appeared to be unusually timed. Another portfolio manager noted that a pattern of significant and well-timed transactions had led to a “level of frustration” among investors.“My gut from watching markets for the last 25 years is, this is really abnormal,” he added. “It’s Monday morning, there’s no important data today, there aren’t any Fed speakers you’d want to front run. It’s an unusually large trade for a day with no event risk . . . Somebody just got a lot richer.”White House spokesperson Kush Desai said, “The only focus of President Trump and Trump administration officials is doing what’s best for the American people.”He further said, “The White House does not tolerate any administration official illegally profiteering off of insider knowledge, and any implication that officials are engaged in such activity without evidence is baseless and irresponsible reporting.”Trump also signalled flexibility in his stance, leaving room for a possible shift in approach even as he highlighted the favourable response in energy markets to his earlier social media post about ongoing talks.“The price of oil will drop like a rock, as soon as a deal is done. I guess it already is today,” Trump said. “Now we have a very serious chance of making a deal. That doesn’t guarantee anything. I’m not guaranteeing anything. I’m not going to come out here in a week or two weeks, and have you all say, ‘Oh, you said…’ — I didn’t say anything.”In a post on X later on Monday, Iran’s parliament Speaker Mohammad-Bagher Ghalibaf rejected claims that any talks had taken place between Washington and Tehran, prompting a retreat in global equities and renewed buying interest in energy markets.He said: “Fake news is used to manipulate the financial and oil markets and escape the quagmire in which the US and Israel are trapped.”A commodities trader noted that while the volume of oil futures sold was not particularly large compared to overall market activity, which had already been elevated even before the conflict, a notable movement was observed in TTF, the European gas benchmark, around the same time.Tim Skirrow, head of derivatives at Energy Aspects, said: “That is a larger than usual volume [in Brent and WTI] than I would expect at that time of day, but in the same breath it’s not excessively large. I find it a bit hard to join the dots here.”He further added that Brent futures and options markets had attracted “significant inflows” from funds in recent weeks. “Given the price reaction, it seems that nearly everyone was long. This is almost a necessary precursor for such a violent move.”
