Funds Push Brent Bull Bets to Highest Since February 2020
Hedge funds have staked their most bullish claim on Brent crude oil in over four years, signaling a strong conviction that geopolitical turmoil will continue to drive prices higher. For the week ending March 10, data from the Intercontinental Exchange shows that money managers increased their net long positions in Brent by 65,438 contracts to a total of 351,032. This marks the highest level of bullish sentiment for the global oil benchmark since February 2020. Simultaneously, bullish wagers on West Texas Intermediate (WTI) crude climbed to an eight-month high, underscoring a broad-based expectation of rising energy costs.
Iran Conflict Wipes Out WTI-Brent Spread
The surge in speculative buying is a direct response to escalating military conflict in the Middle East, which has stoked fears of a severe supply disruption. The risk premium is visible in oil market volatility, with the oil VIX (^OVX) reaching levels not seen since the market panic of April 2020. The extreme stress is also reflected in the pricing relationship between the world's two main oil benchmarks. WTI, which is priced at inland hubs in the U.S. and typically trades at a discount to seaborne Brent, has recently traded at parity. This rare convergence indicates that global buyers are scrambling for any available barrels, effectively erasing WTI's usual logistical discount as the conflict threatens tanker traffic through the Strait of Hormuz.
Strategic Reserves Seen as Insufficient Buffer
While crude prices have been volatile, briefly spiking above $100 per barrel, the sustained increase in bullish positioning suggests traders are skeptical that government intervention can tame the market. Finance ministers from the G7 nations have discussed a coordinated release from their Strategic Petroleum Reserves (SPR) to stabilize prices but have not yet taken action. However, hedge funds appear to be betting that such measures would be insufficient. The U.S. SPR, for instance, has a maximum theoretical drawdown rate of 4.4 million barrels per day, a ceiling that may not be enough to offset a major disruption in the Persian Gulf. With physical supply routes at risk, investors are wagering that the war-driven supply shock will overwhelm any policy response.
Edgen Stock·Mar 13 2026, 21:19