Concerns Over Possible Insider Trading in Oil Bets

A senior adviser to the chairman of the commodities regulator reportedly directed career staff to retract a referral regarding potential insider trading linked to oil bets, according to Bloomberg.

Bloomberg reported that analysts from the Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight had flagged trades made in connection with President Donald Trump’s March 23 announcement concerning Iran to the enforcement division. Mel Gunewardena, a senior adviser to CFTC Chairman Michael Selig, instructed a supervisor to withdraw that referral.

On March 23, during a brief two-minute period starting at 6:49 a.m., traders sold contracts for at least 6 million barrels of Brent and West Texas Intermediate crude, which was significantly higher—over 8.5 times—than the typical trading volume for that time in the previous week. Approximately 15 minutes later, Trump took to Truth Social to announce he was easing his threats against Iranian power plants, which led to a sharp drop in Brent prices, declining by as much as 14%.

The Justice Department, alongside offices of Republican Senator John Boozman of Arkansas, who heads the Senate Agriculture Committee, and Democratic Senators Elizabeth Warren and Amy Klobuchar, did not respond immediately to requests for comments.

“The CFTC does not confirm or deny any investigation,” stated CFTC spokesperson Zach Fulton.

Tim Skirrow, the head of derivatives at Energy Aspects, suggested to Bloomberg that the trades right before a headline-driven sell-off might indicate that someone either got extremely lucky or had prior knowledge.

Gunewardena convened a new team to examine the trading further, and by July, the supervisor he had told to retract the referral had departed from the agency. Although some other team members also left or were reassigned, it’s unclear if those changes were connected.

According to a Bloomberg source, the original findings were primarily focused on the U.S., and this led the agency to expand its review to the international scope—a task for which Gunewardena, a former Goldman Sachs and State Street executive, was deemed well-suited.

“Significant and consistently timely trades should be under scrutiny to ensure all market players adhere to the same regulations,” commented EJ Antoni, chief economist at the Heritage Foundation’s Institute for Economic Policy Studies. “Neglecting this principle undermines confidence in our commodity and financial markets, which are considered among the best globally.”

“In this case, a broad review of both national and international participants would likely be most appropriate. After all, sunlight is the best disinfectant,” Antoni added.

With rising oil and gas prices straining the budgets of many Americans, Dennis Kelleher, co-founder, president, and CEO of Better Markets, urged the CFTC to prioritize monitoring oil markets to safeguard consumers’ finances. He emphasized that the agency holds significant power to combat wrongdoings in the oil market.

Kelleher recommended that the CFTC publicly release all relevant documents, called for an immediate investigation from the inspector general, and proposed that the Department of Justice should also initiate a criminal inquiry.

The CFTC’s enforcement division continues to investigate the trading with specific attention on events from March 23. Additionally, the Justice Department has begun a parallel investigation, as reported earlier this year.

As per a source acquainted with the situation, the CFTC is engaged in an extensive investigation into suspicious oil trades that commenced in late March, with all parties referred to the enforcement team currently being examined. This source rejected any contrary reports as “false and malicious.”

Warren and Senator Sheldon Whitehouse of Rhode Island had asked Selig in April to delve into the trades from March 23 as well as a $950 million wager on falling oil prices made just hours before Trump declared a two-week ceasefire with Iran on April 7.

Senator Raphael Warnock of Georgia and four Democratic colleagues also pressed the CFTC in May for a public update regarding the potential manipulation or misuse of nonpublic information.

According to agency data cited by Bloomberg, the CFTC initiated 13 enforcement actions in the fiscal year 2025, a significant decline from 58 in 2024 and 96 in 2023.