The price of oil plummeted and stock markets soared after the US President announced the US military's strikes on Iranian energy infrastructure would halt for five days.
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Markets in the UK are being watched for signs of insider trading after traders bet millions of dollars in oil markets minutes before Donald Trump announced he is postponing strikes on Iran’s power plants.
The volume of trade spiked around fifteen minutes before Mr Trump took to Truth Social to reveal the five-day pause to attacks on Iranian energy infrastructure, data shows.
The price of oil plummeted as stock markets soared following the announcement, sparking concerns from financial analysts that bets may have been placed with prior knowledge of the move.
The Financial Conduct Authority (FCA), the UK’s finance watchdog, said on Tuesday “we are absolutely watching the markets” following the spike in unusual activity.
Nikhil Rathi, chief executive of the FCA, told the House of Commons Treasury Committee: “These are extraordinary times. There has been a significant energy, oil price shock.
“The markets are seeking to process in real time very significant pieces of news and our primary focus has been on ensuring resilience and functioning.”
Pressed on how the FCA is watching for signs of insider trading, he added: “We look at the transaction data that we get, the reporting we get, the suspicious activity reports that we receive.”
He also stressed that the oil market was a “distinct market” with “many state actors” including oil producing nations and their suppliers.
The US president had threatened strikes on Tehran's power plants unless it reopened Hormuz, but extended a 48-hour deadline he imposed on Saturday to reassure global markets.
Iran responded to Mr Trump's threats on Sunday by saying if its plants were targeted then energy infrastructure "across the entire region" would be "irreversibly destroyed".
Markets had closed that day, but dipped sharply across Asia when they re-opened on Monday morning, as the price of oil started to rise.
But at 11:04am on Monday, before US markets opened for the week, the president posted on his Truth Social platform that Washington had held "VERY GOOD AND PRODUCTIVE CONVERSATIONS" with Tehran over a "COMPLETE AND TOTAL RESOLUTION" to hostilities.Stocks immediately bounced and the price of oil plunged to as low as $84 (£63) per barrel for the benchmark US price.
Up to 734 bets on WTI crude oil contracts were placed on the New York Mercantile Exchange (Nymex) at 06:49 ET. That rose to 2,168 just one minute later – the equivalent to around $170m.
Mukesh Sahdev, chief oil analysts at XAnalysts, said: “At that time, there were no indications that any serious talks had been taking place between the US and Iran. So to place so much money on oil going down raises questions".
Meanwhile, data flagged by market-tracking account Unusual Whales showed traders bought around $1.5 billion in S&P 500 futures five minutes ahead of Mr Trump’s announcement and sold around $192 million in oil futures.
Connecticut Senator Chris Murphy said this amounts to “mindblowing corruption” and demanded answers from anyone behind the “$1.5 billion bet.”He wrote on X: “Who was it? Trump? A family member? A White House staffer?” There is no indication of foul play on Mr Trump’s part.
A White House spokesperson said: “The White House does not tolerate any administration official illegally profiteering off of insider knowledge, and any implication that officials are engaged in such activity without evidence is baseless and irresponsible reporting.”
Oil prices have soared to as much as 120 dollars a barrel in response to Iran’s stranglehold on tankers passing through the Strait of Hormuz.
This has led to the average price of a litre of petrol at UK forecourts rising from 132.9p on February 27 to 146.4p on Monday.