Washington is digging into a string of eyebrow-raising oil trades that seemed to know what was coming out of the White House and Tehran before the rest of the world did.
Federal investigators have opened an inquiry into a cluster of unusually well timed bets that crude prices would fall, placed minutes or hours before major public announcements on the U.S.-Iran conflict. The pattern includes large, concentrated positions laid down ahead of statements from President Donald Trump and Iranian officials, drawing scrutiny from the Commodity Futures Trading Commission and, according to reporting, the Department of Justice. Regulators and prosecutors are now pulling exchange records to find out whether anyone rode nonpublic government information to quick profits in a whipsaw oil market.
According to ABC News, which reviewed London Stock Exchange Group data, investigators have zeroed in on four trading clusters totaling about $2.6 billion. The dataset shows more than $500 million placed roughly 15 minutes before Mr. Trump’s March 23 post delaying planned strikes on Iran’s power grid; about $960 million wagered hours before an April 7 ceasefire announcement; around $760 million placed shortly before Iranian foreign minister Abbas Araghchi declared the Strait of Hormuz open on April 17; and roughly $430 million traded about 15 minutes before a ceasefire extension on April 21.
Reuters analysis expands the footprint
A separate review by Reuters found the suspicious footprint grows significantly when similar positions in diesel, gasoline and longer-dated crude contracts are added to the tally, lifting the total to as much as $7 billion.
Reuters also reports that the CFTC has asked exchanges for trader identifiers that can be used to trace orders back to specific firms and accounts. In prepared testimony, CFTC Chairman Michael Selig warned that regulators intend to follow the trail, saying, “We will find you, and you will face the full force of the law.”
Regulators press exchanges for records
As Bloomberg reported in April, the CFTC has been leading the initial review and has requested detailed trading records from the major venues that list Brent and WTI, citing the operators of the Intercontinental Exchange and CME Group.
Exchanges and federal agencies have declined to publicly spell out the full scope of the probes. Behind the scenes, market surveillance teams typically match exchange timestamps and operator codes with clearing and broker records in an effort to reconstruct who placed which orders and when.
How investigators are tracing the trades
Investigators are expected to focus on the exchange identifiers attached to electronic orders, including the so-called “Tag 50” and other operator codes that tie trading activity to specific desks and users. Connecting those codes to clearing firms and brokerage accounts is central to any enforcement case, Reuters reports.
Lawmakers are also pressing for answers. In an April 9 letter to the CFTC, Senators Elizabeth Warren and Sheldon Whitehouse asked the agency to explain whether it had opened investigations into the March 23 and April 7 trading spikes and requested a timeline of any review. The letter, posted by the Senate Banking Committee, is public.
Legal implications
The CFTC’s Division of Enforcement reiterated in a February advisory that misappropriating confidential government information and engaging in manipulative schemes can be pursued under Section 6(c)(1) of the Commodity Exchange Act and Rule 180.1. The advisory warns that such conduct can result in civil penalties and criminal referrals.
The CFTC and enforcement lawyers say the central evidentiary challenge will be proving who had material nonpublic information and whether it was used in breach of a legal duty.
What happens next is likely to be technical and slow. Exchanges are expected to hand over timestamped trade and clearing logs, surveillance teams will try to match those records with account data, and prosecutors will decide whether the evidence is strong enough to support charges. Federal agencies have not publicly confirmed the scope of any DOJ review, and the data released so far do not identify the traders behind the positions, ABC News reports. The probes are ongoing.
