Allegations surface of insider oil shorting before Trump's Iran pivot

Following a Bloomberg report that a senior adviser to the CFTC chairman interfered with an insider trading probe into oil, social media users alleged that influential insiders leveraged political connections and financial derivatives to drive down oil prices.

Oil analyst Paul Sankey stated that either the administration is leaking information or "somebody very close to the administration is insider trading."

Energy Aspects derivatives head Tim Skirrow thinks "either someone got very lucky or knew something," and a Dallas Fed survey respondent said, "Our hypothesis is the [oil] paper market is being manipulated."

Since before the Iran war, the US Oil Fund ETF has risen 151% year-to-date, though many skeptics argue it should be significantly higher.

Why isn't oil at $200? Because "someone" keeps dumping oil futures all night long, and the CFTC refuses to look into it. Heck, even when it's clear-cut insider trading, the CFTC has been told to "back off," and they did. https://t.co/Do5mmc1YZR https://t.co/GMXME9xkOz pic.twitter.com/ouUEfdyeQb
— Chris Martenson (@chrismartenson) October 13, 2026

CFTC ordered to retract oil insider trading referral

The initial report indicated that Mel Gunewardena, senior adviser to CFTC Chairman Michael Selig, instructed a CFTC supervisor to withdraw an oil futures insider trading referral. Selig was appointed by Donald Trump.

The referral concerned oil bets made just minutes before Trump stepped back from threats to attack Iran's power plants on March 23. That reversal by the president quickly affected oil prices and gave the suspicious traders a profitable gain within minutes.

In particular, the traders had sold more than 6 million barrels of oil futures contracts right before Brent contracts dropped by up to 14%.

Aitan Goelman, who served as CFTC enforcement director until February 2017, stated that such interference hampers staff who are trying to pursue legitimate enforcement actions against wrongdoers.

"The rug can get pulled out from under them" due to orders from above, Goelman said.

Truth Social's parent company actively promotes trading based on Trump's geopolitical remarks. Access to the Truth API costs $60,000 to $100,000 per month.

The feed provides early access to Trump's posts and is designed for high-frequency traders.

Trump also maintains actively trading investment accounts. Bloomberg tallied close to 28,700 trades made by Trump or his money managers from 2025 through the first half of 2026, exceeding the combined 22,200 trades by all members of Congress in that period.

Fundamental factors behind moderate oil prices

While it is tempting to claim that traders with ties to Trump used political influence to keep oil prices low, there are many fundamental reasons why oil has traded in relatively moderate ranges.

Lakshmi Sreekumar, formerly an institutional analyst at Capital One and now a member of the Dallas Federal Reserve's Energy Advisory Council, has offered frequently cited reasons for oil's stability during historic military operations.

Her analysis does not reference any covert futures selling or interference with insider trading enforcement.

Specifically, Sreekumar attributes 37% of the re-routing of oil away from the Strait of Hormuz to pipelines, 33% to lower overall oil demand (particularly from China), 11% to inventory releases like strategic petroleum reserves, and 19% to tankers that pass through Hormuz under special protection or with their transponders turned off.

The substantial drop in demand reached about 8 million barrels per day at its peak, led by China cutting its consumption.

Furthermore, Saudi Arabia's East-West pipeline can divert 5-7 million barrels per day, depending on Yanbu port capacity. Crude from Hormuz can also be rerouted to Asia via the Bab el-Mandeb strait, or go through the Strait of Gibraltar and around southern Africa to reach Asian buyers.

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

The reason is not a specific derivatives trader shielded by the Trump administration, but a worldwide rebalancing of flows around Hormuz, driven by moderately higher barrel prices.