Insiders Shorted Oil Before Trump Backed Down on Iran, CFTC Retraction Sparks Outrage
Supervisor told to retract oil insider trading probe
Mel Gunewardena, a senior adviser to CFTC Chairman Michael Selig, directed a CFTC supervisor to pull back an insider trading referral tied to suspicious oil futures bets. Selig was appointed by Donald Trump. The referral concerned trades placed minutes before Trump reversed course on March 23, stepping back from threats to strike Iran's power plants.
The presidential reversal sent oil prices tumbling. Traders who had sold over 6 million barrels' worth of oil futures contracts just before the announcement saw Brent crude drop as much as 14%, delivering immediate profits.
Key numbers and reactions
- Over 6 million barrels of oil futures were sold before the price drop linked to Trump's Iran reversal on March 23.
- Brent crude fell as much as 14% after the announcement.
- The US Oil Fund ETF, a fund that tracks oil prices through futures contracts, is up 151% year-to-date since before the Iran conflict began.
- Skeptics argue oil should be trading much higher given the geopolitical context.
- Trump or his money managers executed nearly 28,700 trades between 2025 and the first half of 2026, compared to 22,200 total trades by all members of Congress over the same period.
What critics are saying
Oil analyst Paul Sankey told New York Post that either the administration is leaking information or someone very close to it is insider trading. Tim Skirrow, head of derivatives at Energy Aspects, said it looked like "either someone got very lucky or knew something."
Chris Martenson tweeted that oil futures were being dumped all night long while the CFTC refused to investigate, even when "clear-cut insider trading" was flagged.
Aitan Goelman, the CFTC's former enforcement director, warned that such high-level interventions undermine staff efforts to pursue enforcement actions against bad actors, saying "the rug can get pulled out from under them" from orders on high.
Trump's trading and the information edge
Trump's social media company, Truth Social, runs an API that feeds posts to traders at a monthly cost of $60,000 to $100,000. The service delivers Trump's posts early, giving high-frequency traders a timing advantage over other market participants.
Fundamental reasons oil isn't higher
Lakshmi Sreekumar, a former Capital One institutional analyst who sits on the Dallas Fed's Energy Advisory Council, offered an explanation for why oil prices remain moderate despite the conflict. She pointed to supply chain rerouting rather than market manipulation.
According to Sreekumar, oil pipelines account for 37% of rerouting away from the Strait of Hormuz, reduced demand — especially from China, which slashed consumption by about 8 million barrels a day at its peak — accounts for 33%. Strategic petroleum reserve releases handled 11%, and tankers slipping through Hormuz with transponders off or under special guard made up 19%.
Saudi Arabia's East-West pipeline can redirect 5 to 7 million barrels a day depending on capacity at the Yanbu port. Crude from Hormuz can also detour through the Bab el-Mandeb strait or around the southern tip of Africa via Gibraltar to reach Asian buyers. Sreekumar concluded: "That, my friends, is why oil prices are not $250." Her analysis did not mention derivatives selling or insider trading enforcement intervention.
Why this matters
The case raises questions about whether individuals with access to Trump's geopolitical decisions used that access to profit in oil markets — a market where derivatives like futures contracts allow traders to bet on price movements without owning the physical commodity. It also highlights the broader concern about information asymmetry when political insiders can trade ahead of major policy announcements.
What is still unclear
It has not been independently confirmed who placed the suspicious oil futures trades or whether they were connected to the Trump administration. The CFTC has not publicly explained the reasons for retracting the referral.
Source
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
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