Unusual Oil Trades Before Trump's Iran Policy Shift Trigger CFTC Probe
The top US regulator for derivatives trading is investigating a series of unusually well-timed oil futures trades made before Trump's recent shift in Iran war policy, according to people familiar with the matter.
The Commodity Futures Trading Commission (CFTC) is leading the probe into oil futures trading on the CME Group and Intercontinental Exchange platforms, the sources said. Both exchanges have been asked to provide data.
The CFTC is looking into at least two instances over roughly two weeks in which trading volume suddenly surged before major policy announcements, the sources said. The data requested from the exchanges includes the 'Tag 50' operator identifier, which identifies the entity behind the trade.
Exceptionally large trading volume over the past few weeks has raised concerns about possible misuse of major nonpublic information. At the start of the conflict, historic disruptions to Middle East oil transport drove prices sharply higher. In the following weeks, as the market speculated about when tanker traffic through the Strait of Hormuz might resume, prices swung wildly.
Two Democratic senators have urged the CFTC to investigate possible violations, increasing scrutiny of these unusually well-timed trades. Last month, the White House issued an internal memo warning staff not to use sensitive information to trade in financial markets or on event-betting platforms.
