On the eve of the United States and Iran announcing a ceasefire agreement, the oil market witnessed a massive short-selling contract worth nearly $1 billion (3.982 billion ringgit). The precision timing of this market entry has drawn intense attention, fueling speculation that someone may have acted in advance with insider information.
According to various foreign media citing data from the London Stock Exchange Group, at 7:45 pm GMT on Tuesday (3:45 am Wednesday Malaysia time), the market suddenly saw a total of 8,600 contracts of Brent and US crude oil futures sold short. Just about three hours later, at around 10:30 pm on Tuesday, US President Trump abruptly changed his previously hardline stance, retracting his earlier threat to "destroy an entire civilization" and announced the ceasefire agreement with Iran.
As a result of this news, crude oil futures prices plummeted by about 15% when markets opened on Wednesday, briefly falling below the $100 per barrel mark.
● Extremely Unusual Trading Tactics
Traders often use futures positions to hedge large spot crude oil trades, and betting on rising or falling oil prices is not uncommon in itself. However, such trades are rarely executed in large single orders. Usually, traders prefer to spread their orders across multiple exchanges and have brokers use algorithmic trading to execute those orders in batches over several hours to avoid their bets impacting prices. Additionally, large orders are seldom executed after settlement. The settlement time for crude oil futures is 6:30 pm GMT from Monday to Friday.
Notably, this incident is almost identical to another operation on the 23rd of last month. At that time, within just 15 minutes before Trump announced a delay in striking Iran’s energy infrastructure, the market also saw a sudden $500 million (1.991 billion ringgit) short sale of crude oil. The news later triggered a 15% slump in oil prices.
The consecutive mysterious large transactions occurring right before major news releases have already raised market concerns about potential information leakage and unfair trading.