Robot Traders Boost Bullish Oil Bets Amid Trump's Iran Rhetoric

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Algorithmic traders have turned bullish on crude oil for the first time since September as U.S. President Donald Trump intensifies his rhetoric against the Iranian government according to Bloomberg. Trend-following commodity trading advisers, which use computer models to bet on price moves, were about 18% long relative to their maximum possible positions in Brent oil futures on Tuesday as reported. That marks the biggest single-day shift in the robot traders' wagers since Oct. 10 according to data.

The rapid flip shows that even as the oil market grapples with a growing supply glut, geopolitical tensions can spark a rally in an instant according to analysis. Algorithmic traders' shift has added to upward momentum and comes as other gauges begin to reflect investor expectations of a price surge according to Bloomberg.

Brent futures have risen about 9% over the past four sessions, while West Texas Intermediate, the U.S. benchmark, hit the highest since early November as geopolitical risks swirl from Iran to the Black Sea as reported.

Why Did This Happen?

President Trump has intensified his rhetoric against Iran, saying he has "cancelled all meetings with Iranian officials until the senseless killing of protesters stops" and "help is on its way" according to Bloomberg. He previously announced a 25% tariff on goods from countries "doing business" with Iran according to reports.

Iran is OPEC's fourth-largest producer, though there are no signs yet that exports have been disrupted according to analysis. Meanwhile, two oil tankers were attacked near the loading terminal for the Caspian Pipeline Consortium, the latest significant incident complicating Kazakhstan's crude exports according to Bloomberg.

How Did Markets Respond?

In a post Tuesday on Truth Social, Trump said he has "cancelled all meetings with Iranian officials until the senseless killing of protesters stops" and "help is on its way" according to reports. He earlier announced a 25% tariff on goods from countries "doing business" with Iran according to Bloomberg.

Oil prices climbed to their highest level since November after Trump said the U.S. would impose a 25% tariff on any country doing business with Iran according to Barron's.

In early trading, Brent crude and WTI both gained 0.5% to $64.17 a barrel and $59.81 a barrel, respectively, after settling higher in the previous session according to market data.

What Are Analysts Watching Next?

Energy Aspects, which also tracks commodity trading advisers' positioning, said robot traders may buy roughly 150,000 lots of crude over the coming week according to Bloomberg. CTAs, purchases by commodity indexes and options trading have all added to the crude rally in recent days, according to the market analysis firm according to reports.

Markets are also balancing this with developments in Venezuela according to analysis.

The potential for reduced Iranian supply has tempered earlier bearish sentiment driven by expectations of a global glut according to Barron's.

Oil prices are spiking as the Jerusalem Post reported that Iran's regime has killed over 12,000 people during the ongoing protests according to Investing.com. In direct response, President Trump has announced a sweeping 25% tariff on any country trading with Iran according to Investing.com.

The situation is tense, as Trump said Iran wants to negotiate but warned action may be necessary before any meeting according to reports.

Reports say that "Several Greek-managed oil tankers near the Caspian Pipeline Consortium (CPC) loading terminal off the Russian coast were struck by drones overnight amid escalating tensions in the Black Sea region" according to Investing.com. The Matilda sustained minor deck damage with no casualties, while Delta Harmony experienced a fire that was quickly contained according to reports.