US probes suspicious oil trades made before Trump Iran pivots, source says

By Anirban Sen, Chris Prentice and Anusha Shah

April 15 (Reuters) - The U.S. Commodity Futures Trading Commission is examining a series of trades in oil futures placed shortly before major shifts in President Donald Trump’s Iran war policy, a person familiar with the matter said on Wednesday.

CFTC Chairman Michael Selig said in remarks prepared for delivery to Congress on Thursday that the agency will go after wrongdoers, but nothing in the testimony addressed any specific investigation and an agency spokesperson declined to comment.

"I want to be crystal clear: to anyone who engages in fraud, manipulation, or insider trading in any of our markets: we will find you, and you will face the full force of the law," Selig said in the remarks seen by Reuters. 

The CFTC probe is focused on trading of oil futures contracts on platforms belonging to CME Group and Intercontinental Exchange, with investigators examining at least two instances of oil trades made on March 23 and April 7, the source said. 

Well‑timed trades may have generated millions of dollars in profits, drawing concern from lawmakers and legal experts that decisions around war and diplomacy can create opportunities for abuse in volatile and opaque derivatives markets.

Investors placed an approximately $950 million bet on oil prices just hours ​before the U.S. and Iran announced a ceasefire last week. There was similarly well-timed trading in the oil market on March 23. 

The data requested from the exchanges include the so-called Tag 50 identifications of the entities behind the trades. 

"At CME Group, we vigorously surveil our markets and work closely with the CFTC to oversee trading activity," a CME spokesperson said in a statement, adding that any review of market behavior must include all venues, including prediction markets that list related products with little to no visibility. 

ICE declined to comment on the matter. 

The White House has warned staff against improperly leveraging their ​positions to place bets in futures markets amid the ongoing war in Iran.

The CFTC’s enforcement director said last month the agency was aware of speculation regarding insider trading in CFTC-regulated markets and was “watching”.

In a statement, Democratic Senator Elizabeth Warren of Massachusetts, a prominent overseer and critic of the CFTC, said the agency’s probe is a start and that regulators should do more to investigate any insider trading by administration officials.

The White House did not immediately respond to a request for comment on Warren’s statement.