On April 14, Representative Ritchie Torres urged U.S. market regulators to investigate a cluster of substantial oil trades that were executed just hours before a U.S.-Iran ceasefire was announced. Torres repeated concerns he raised in a letter last week about lucrative trading activity in oil markets earlier in March, and on Tuesday he called on the Securities and Exchange Commission chairman and the Commodity Futures Trading Commission chairman to open a joint probe into the recent transactions.
According to reporting released last week, investors placed trades within roughly one minute that wagered on a fall in the oil price worth about $950 million in total. Those orders were executed a couple of hours before the White House announced a two-week ceasefire with Iran, an announcement that coincided with crude futures dropping by around 15% at the start of regular trading on April 8.
Torres said in his correspondence to regulators: "If accurate, the timing and scale of these trades warrant immediate scrutiny." He initially contacted regulators last week to press for an examination of profitable recent activity in oil markets that dated back to March, and followed up with the request for a coordinated review on Tuesday.
Other Democratic lawmakers have expressed related concerns about trading that appears to have been timed ahead of major U.S. policy moves. In a separate letter released on Friday, Senators Elizabeth Warren and Sheldon Whitehouse asked regulators to investigate unusually large commodity and equity trades that occurred shortly before significant White House decisions affecting Iran, Venezuela and tariff policy.
Market conditions have been extremely volatile since the start of the conflict with Iran, which has effectively closed the Strait of Hormuz - the route through which roughly 20% of daily global energy supplies normally flow. Oil prices have jumped in dramatic fashion during the period, rising by around 40% to levels above $100 per barrel amid the heightened supply risk and market turbulence.
Representatives for both the SEC and the CFTC did not immediately respond to requests for comment regarding the calls for a joint investigation.
Context and next steps
The congressman is seeking a coordinated regulatory inquiry focused on the timing and magnitude of the trades. Lawmakers and market participants will be watching for any formal responses or announcements from the two regulatory agencies about whether they will open an investigation.