Last month, we reported that over $1 billion in "perfectly timed" wagers, spanning both traditional oil futures and digital prediction markets, accurately anticipated major military and diplomatic shifts linked to developments in the Iran-US war minutes before they were publicly announced, raising major suspicion of insider trading. Many suspicious accounts were newly created and only traded on specific Iran-related events with a win rate of up to 93%. Well, the final numbers are in, and the initial report might only have been the tip of the iceberg. While previous reports focused on ~$2.6 billion in front-month crude contracts, a broader analysis by Reuters has revealed that total wagers, including bets on Brent, WTI, European diesel, and U.S. gasoline futures, hit $7 billion. According to an analysis by Reuters, the giant bets were executed in large blocks on four specific days, often 15 to 20 minutes before announcements that triggered double-digit declines in oil prices.
The first giant trade was executed on March 23 around 10:49–10:50 GMT, roughly 15-20 minutes before an 11:05 GMT announcement on Truth Social by President Trump, which stated a delay to planned strikes on Iranian power and energy infrastructure. The announcement followed a period of intense volatility in the Strait of Hormuz, with the delay intended to allow for negotiations. According to LSEG data cited by Reuters, traders executed positions on 20,000 lots of Brent and WTI futures, along with additional gasoline and gasoil futures, totaling roughly $2.2 billion.
The announcement triggered an oil price crash, with crude futures falling by as much as 15%, marking one of the largest intraday drops on record. The second major trade took place on April 7 whereby sell orders on oil and gasoline futures totalling approximately $2.12 billion were executed in a single minute, immediately before a surprise announcement of a two-week ceasefire between the U.S. and Iran. The trades occurred while the market was in a thin-volume, post-settlement phase, with crude futures plummeting by roughly 15% to below $100 a barrel by the start of the next trading session.
The third wager was placed on April 17 when roughly $2 billion of oil futures, equivalent to ~7,990 lots of Brent, WTI and gasoline, were sold between 1224 and 1225 GMT minutes before Iranian Foreign Minister Abbas Araghchi announced the Strait of Hormuz was "completely open" for commercial traffic. Hardly surprisingly, crude oil prices plummeted, with Brent crude falling around 9-10% to approximately $88–$90 per barrel while WTI fell as much as 11-12% to around $82-$83 per barrel. The final trade was executed on April 21roughly $830 million in oil futures (Brent and WTI contracts) were sold in a massive, well-timed trade 15 minutes before U.S. President Donald Trump announced an indefinite ceasefire extension with Iran. The trades occurred between 19:54 and 19:56 GMT, shortly before the 20:10 GMT announcement. Similar to previous trades, the sales occurred during post-settlement hours after 18:30 GMT when liquidity is typically low, making such a high-volume sale unusual. Whereas oil prices were on a downtrend around the time Trump broke the news, Brent crude experienced an immediate downward dip following this specific announcement.
That said, the suspicious oil price trades linked to the war in Iran might have begun weeks earlier. Previously, we reported that an unusual influx of roughly 150 accounts on Polymarket placed hundreds of bets totaling over $855,000 accurately predicted the night of February 27 that the U.S. would strike Iran within 24 hours. Analytics firm Bubblemaps identified that many of these accounts were newly created in February and focused specifically on predicting U.S. strikes on Iran. An anonymous user operating under the handle "Magamyman" turned an initial investment of about $87,000 into over $533,000 by betting on the "removal" of Supreme Leader Ayatollah Ali Khamenei just 71 minutes before news of the strikes became public.
Analysts and lawmakers, including Senator Elizabeth Warren, have flagged these trades as likely resulting from insider leaks.
Whereas there are reports that the Department of Justice (DOJ) & CFTC are actively investigating whether traders improperly obtained non-public information tied to military and diplomatic developments, trying to rein in the illegal practice might be a wild goose chase. Indeed, Craig Holman, a government affairs lobbyist for Public Citizen, has expressed significant skepticism regarding the ability or willingness of the CFTC to investigate, pointing to significant departures of investigative officers while enforcement at its flagship Chicago office has dropped to zero. Additionally, market experts have warned that the surge in online prediction markets and digital betting, combined with complex legal definitions, makes detecting insider trading significantly harder. Platforms like Polymarket and Kalshi allow users to bet on real-world events-leading to cases where individuals with material non-public information (MNPI) can make large, profitable trades shortly before news breaks.
By Alex Kimani for Oilprice.com
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