CFTC Probes Suspicious Oil Futures Trades Before Trump Iran Policy Shift

The top US derivatives regulator is investigating a series of unusually well-timed oil futures trades that occurred before Trump's recent Iran war policy shift, according to people familiar with the matter.

The Commodity Futures Trading Commission is leading a probe into oil futures trades on the Chicago Mercantile Exchange and Intercontinental Exchange (133.88, -0.71, -0.53%), people familiar said. Both exchanges have been asked to provide data.

The CFTC is investigating at least two instances over about two weeks where trading volumes spiked just before major policy announcements, the people said. The regulator requested exchange data including "Tag 50" operator identification codes, which reveal the identity of the entity behind the trades.

Unusually large trading volumes in recent weeks have raised concerns about potential misuse of material nonpublic information. At the start of the conflict, historic disruptions to Middle East oil shipments sent oil prices soaring. In subsequent weeks, prices swung wildly as markets speculated on when tanker traffic through the Strait of Hormuz might resume.

Two Democratic senators have urged the CFTC to probe potential misconduct, intensifying scrutiny of these 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 event-betting platforms.

Editor: Ding Wenwu