$920M Crude Oil Short Hit 70 Minutes Before US-Iran Deal Report

A roughly $920 million crude oil short hit the tape in the dead of night, just 70 minutes before Axios reported the U.S. and Iran were closing in on a deal to end the war. Oil cratered, the position printed nine figures of paper gains, and the timing has traders asking the obvious question.

What happened

A mystery trader shorted roughly $920 million in crude oil 70 minutes before Axios reported the U.S. and Iran were closing in on a deal to end the war, sending oil tumbling, according to The Kobeissi Letter. The trade hit the tape at 3:40 a.m. ET, an unusually large block for the off-hours window.

At 3:40 AM ET, nearly 10,000 contracts worth of crude oil shorts were taken without any major news. This is equivalent to ~$920 million in notional value, an unusually large trade for 3:40 AM ET. At 4:50 AM ET, just 70 minutes later, Axios reported that the US is ‘close’ to a ‘memorandum of understanding’ to end the Iran War.

The payoff

Oil prices fell more than 12% by 7:00 a.m., handing the position a roughly $125 million paper gain. The window from entry to peak P&L was a matter of hours.

Axios Middle East reporter Barak Ravid published the exclusive that the White House believed the US and Iran were on the verge of agreeing to a one-page memorandum of understanding to end the war, which included more nuclear negotiations, one of the key sticking points for President Donald Trump.

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The reversal

Iran rolled out a new ‘Persian Gulf Strait Authority’ to permanently regulate vessel transit through Hormuz, undercutting the optimism in the Axios report. The Islamic Revolutionary Guard Corps navy added that safe passage would be ‘ensured’ under new procedures, without specifying what those procedures entail.

Oil subsequently rebounded and surged 8%, underscoring the extreme volatility in energy markets as traders reacted to rapidly changing geopolitical developments. President Trump later warned on Truth Social that ‘the bombing starts’ at ‘a much higher level and intensity’ if Iran rejects the 14-point proposal.

Not the first suspicious print

It is the latest in a string of similarly timed trades. A roughly $760 million short landed 20 minutes before Iran’s foreign minister declared the Strait of Hormuz ‘fully open’ last month.

The Financial Times also reported a surge of more than $580 million in oil futures trading right before Trump announced a pause in strikes on Iran’s energy facilities in March. The pattern is drawing insider-trading accusations from lawmakers and market participants. For more, see other news.

Options market and stocks to watch

Watch for continued whipsaw across energy names tied to crude tape and Hormuz headlines.

• USO: the United States Oil Fund tracks WTI directly and took the brunt of the 12% slide before the bounce.
• SCO: Inverse crude ETF ProShares UltraShort Bloomberg Crude Oil rallied, while the United States Oil Fund tumbled. Watch for flow on further deal-or-no-deal headlines.
• XOM and CVX: Energy majors Exxon Mobil and Chevron traded lower alongside the slide. Watch for IV behavior into any follow-up reporting.
• UCO: leveraged long crude ETF, useful for gauging directional positioning on a Hormuz re-escalation.

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