US Probes Oil Trades Timed Around Trump's Iran Policy Shifts

Federal regulators are investigating whether traders used confidential information about former President Donald Trump's Iran policy to profit from suspiciously timed bets in the oil market.

The U.S. Commodity Futures Trading Commission (CFTC) is scrutinizing a series of well-timed trades in oil futures that occurred just before major announcements on Iran policy by the Trump administration, according to people familiar with the matter. The probe raises questions about potential insider trading at the highest levels of government and its intersection with global commodity markets.

"The investigation stems from concerns about the potential misuse of material, non-public information related to shifts in President Trump's stance on Iran," said a person familiar with the inquiry, who asked not to be named because the probe is confidential. The push for an investigation was reportedly initiated by two Democratic senators.

The CFTC, the top U.S. derivatives regulator, is leading the investigation alongside exchange operators CME Group and Intercontinental Exchange (ICE). Regulators have requested "Tag 50" data from the exchanges, which provides information about the identities behind the trades, to analyze specific instances of surging volumes before the policy announcements.

This inquiry could have significant ramifications, potentially leading to legal penalties for any individuals or firms found to have traded on non-public information. A guilty finding would undermine confidence in market fairness and likely result in heightened regulatory scrutiny over trading that occurs around sensitive government announcements, impacting strategies for market participants.

Unraveling the Trades

The core of the investigation lies in the analysis of trading data immediately preceding sensitive policy shifts. The request for "Tag 50" identification data is a critical step, as it allows regulators to look past the brokers and see the specific individuals or entities responsible for placing the trades. This level of detail is essential for determining if there are any connections between the traders and individuals with access to government information.

While the specific policy announcements in question have not been publicly detailed, the Trump administration saw several abrupt shifts in its Iran policy. These moments often caused significant volatility in the price of WTI and Brent crude oil, creating opportunities for substantial profit or loss. Any trader with advance knowledge of a policy change that would move oil prices could have positioned themselves to gain.

Market Integrity at Stake

The probe was reportedly prompted by a request from two Democratic senators who raised alarms about the trading activity. The investigation highlights the ongoing concern among lawmakers and regulators about the integrity of commodity markets, particularly when they intersect with volatile geopolitical events.

If the CFTC finds evidence of wrongdoing, it could bring enforcement actions that may include substantial fines and trading bans. The findings could also spur a broader review of protocols surrounding the handling of market-sensitive government information. For oil traders and the market at large, the investigation serves as a reminder of the legal and reputational risks of trading on information that is not available to the public.

This article is for informational purposes only and does not constitute investment advice.