Did insiders short oil before Trump backed down on Iran?

Year-to-date, the price of the US Oil Fund ETF is up 151% since before the war in Iran, yet it should be much higher according to many skeptics.

Retracting an oil insider trading referral

The original news was that Mel Gunewardena, a senior adviser to CFTC Chairman Michael Selig, told a CFTC supervisor to retract an oil futures insider trading referral. Donald Trump appointed Selig.

That referral covered oil bets placed minutes before Trump backed off threats to strike Iran’s power plants on March 23. His presidential reversal had an immediate impact on the price of oil and delivered a profitable windfall to the suspicious traders within minutes.

Specifically, those traders had sold over 6 million barrels worth of oil futures contracts immediately prior to Brent contracts falling as much as 14%.

Aitan Goelman, the CFTC’s enforcement director until February 2017, said such interventions burden staff aiming to advance legitimate enforcement actions against bad actors.

“The rug can get pulled out from under them” from orders on high, Goelman lamented.

The parent company of Trump’s social media company, Truth Social, prominently encourages active trading of Trump’s geopolitical statements. The company charges $60,000 to $100,000 monthly for Truth API access.

That feed delivers posts from Trump early and caters to high-frequency traders.

Trump also has investment accounts that trade actively. Bloomberg counted nearly 28,700 trades by Trump or his money manager(s) from 2025 through the first half of 2026, higher than a total 22,200 trades for all members of Congress during that time period.

Non-CFTC reasons for a moderate oil price

Although it was easy to suggest that Trump-connected traders were using political favors to suppress the price of oil, there are plenty of fundamental reasons for the price of oil trading within relatively moderate ranges.

Lakshmi Sreekumar, a former Capital One institutional analyst who sits on the Energy Advisory Council for the Dallas office of the US Federal Reserve, has provided widely cited explanations for oil’s calm price amid historic military actions.

Absent from her explanation is any mention of secretive futures selling or insider trading enforcement intervention.

Specifically, Sreekumar credits oil pipelines for 37% of re-routing oil around the Strait of Hormuz, lower absolute oil demand — especially in China — for 33% of rebalancing Hormuz oil flows, release of inventories such as strategic petroleum reserves for 11%, and finally tankers slipping through Hormuz under special guard or with transponders switched off for 19%.

The incredible reduction in oil demand included about 8 million barrels a day at its peak, led by China slashing its consumption.

Moreover, Saudi Arabia’s East-West pipeline can redirect 5-7 million barrels a day, depending on capacity at the Yanbu port. Hormuz crude can also detour to Asia through the Bab el-Mandeb strait, or pass through the strait of Gibraltar to reach Asian buyers via the southern cape of Africa.

She concluded, “And that, my friends, is why oil prices are not $250.”

Not because of a particular derivatives trader under protection of the Trump administration, but because of a global rebalancing of flows around Hormuz, motivated by modestly elevated barrel prices.