Geopolitical upheavals again turned into a profit machine for Wall Street whales. Early on July 22, the crude oil market experienced violent swings, with a massive short position opened well ahead of a major news story now under intense scrutiny.
Pre-dawn Strike: $920M Short Entered at 3:40 AM ET
Financial analysis account The Kobeissi Letter posted on X detailing a suspicious sequence of trades. At 3:40 AM Eastern Time, when trading was thin, 10,000 crude oil futures contracts were shorted, with a notional value of approximately $920 million. Just 70 minutes later, at 4:50 AM, U.S. media outlet Axios published an exclusive report saying the U.S. and Iran were “close” to a 14-point Memorandum of Understanding (MoU) to end hostilities.
The prospect of peace triggered a panic sell-off. By 7:00 AM, international oil prices had crashed more than 12%. The early short position generated a paper profit of about $125 million in just over three hours.
Iran Strikes Back: Oil Prices V-shaped Rebound
But the script wasn’t over. Minutes after oil hit its bottom, Iran announced the establishment of the “Persian Gulf Strait Authority”, interpreted as strengthening its grip over the Strait of Hormuz. Oil prices rebounded 8% immediately. The entire sequence — collapse and recovery — looked like a choreographed play.
Community Outrage: Calls for CFTC Investigation
The Kobeissi Letter ended its post with “What just happened?” attaching a time-stamped price chart that went viral. Many investors and analysts suspect blatant insider trading or market manipulation. Some suggest political insiders leaked classified information, while others point to Wall Street firms using media headlines to scalp retail traders. There is a growing chorus demanding the Commodity Futures Trading Commission (CFTC) investigate the $920 million short seller.