Investors moved quickly in January to lock prices for U.S. crude at levels not previously seen, driven by concerns about Iranian crude supplies and the prospect of more Venezuelan barrels reaching the U.S. Gulf Coast.
Hedging activity, which allows producers to reduce exposure to sharp price swings by fixing a selling price for future production and provides traders opportunities to profit from volatility, surged on the Intercontinental Exchange (ICE) last month.
ICE data show that trading in WTI Midland at Houston contracts reached a record 1.9 million contracts for the month. Market participants also set a single-day record for that contract, with 257,569 contracts traded on January 30, 2026, a day when U.S. crude futures were near a six-month high amid tensions between Washington and Tehran.
U.S. crude futures closed at around $65 a barrel on January 30, up about 14% from the first trading day of the year.
Jeff Barbuto, senior vice president of global oil markets at ICE, said that Iranian geopolitical tensions have added to risk premiums in the oil market. He also cited severe winter weather in the United States as a factor affecting production and refinery dynamics. Analysts estimated the winter storm removed as much as 2 million barrels per day of crude output at its peak late last month.
Record volumes were not limited to U.S. Midland contracts. Traders also moved a record 188,000 contracts for ICE Houston Western Canadian Select (WCS) futures during January. The WCS benchmark registered a single-day volume record of 19,965 lots on January 6 — the day Caracas and Washington reached a deal to export up to $2 billion worth of Venezuelan crude to the United States.
Barbuto highlighted the market implication of the Venezuelan shipments: "The return of Venezuelan crude has created potential new competition for Canadian oil on the U.S. Gulf Coast and in other export markets, including China," he said. That prospect prompted concerns among market participants that South American barrels could displace Canadian barrels at the Gulf Coast.
Context and implications
The surge in hedging and futures activity in January reflects market participants seeking to manage price risk as geopolitical tensions and weather-related production disruptions altered near-term supply dynamics. The combination of heightened risk premiums tied to Iran, a temporary reduction in U.S. output from winter storms, and renewed Venezuelan exports contributed to elevated trading volumes and record-setting days for multiple benchmarks.