Oil Markets Whipsaw as Hormuz Tensions Flare and Regulators Probe Suspicious Trades

Oil prices erased early gains Friday after the U.S. and Iran exchanged fire in the Strait of Hormuz, with Brent crude dipping 0.4% to $99.66 per barrel after climbing above $101 earlier in the session, while West Texas Intermediate fell 0.7% to $94.12 . According to market data, WTI crude currently trades at $71.50 per barrel, up 0.6%, while Brent sits at $75.20, up 0.5%.

The U.S. and Iran exchanged fire near the Strait of Hormuz on Thursday, adding new strain to the ceasefire, though President Donald Trump insisted the ceasefire remains in effect, calling the strikes "just a love tap" . The fragile ceasefire between the United States and Iran was pushed to the brink after both sides exchanged heavy fire in and around the Strait of Hormuz, marking their most serious military confrontation in months .

Trump said on Truth Social that the attacks happened as three U.S. military ships were transiting through the strait, adding "There was no damage done to the three Destroyers, but great damage done to the Iranian attackers. They were completely destroyed along with numerous small boats" . A U.S. official told PBS that this was "perhaps the most serious exchange of fire since the cease-fire" .

Billions in Suspicious Oil Bets Under Federal Scrutiny

The Commodity Futures Trading Commission has launched an investigation into short oil bets worth a total $7 billion, made in March and April right before statements by President Donald Trump that led to oil price drops, Reuters reported, citing exchange data and unnamed trading sources . The Department of Justice and Commodity Futures Trading Commission are examining at least four oil futures trades totaling more than $2.6 billion .

According to the London Stock Exchange, traders bet over $500 million that oil prices would drop on March 23, just 15 minutes before Trump announced he'd be pausing his planned attacks on Iran's power centers. On April 7, traders bet $960 million on oil prices falling. A few hours later, Trump announced a temporary ceasefire . A separate transaction took place on April 17, when traders wagered $760 million that oil prices would fall about 20 minutes before Iranian Foreign Minister Abbas Araghchi posted that the Strait of Hormuz was open. Additional activity followed on April 21, when bets totaling $430 million came about 15 minutes before Trump extended the ceasefire .

According to reporting by Reuters, traders placed over $500 million in crude oil futures bets approximately fifteen minutes before Trump's March 22nd Truth Social post announcing a pause in planned strikes against Iranian energy infrastructure. Oil prices plummeted more than 10 percent following the announcement, generating enormous profits for whoever made those trades .

Canada Sees "Golden Opportunity" as Crisis Disrupts Global Supply

The IEA's Fatih Birol said the world was losing 14 million barrels in daily supply because of the war, and reliability has gained even more prominence for importers of energy commodities . After the war ends, the IEA's secretary general said, "there will be an energy security risk premium," and "the most important resource, or card, that Canada has today is trust" .

International Energy Agency Executive Director Fatih Birol met this week with Canadian Prime Minister Mark Carney and other senior officials to discuss energy market turmoil tied to the Middle East conflict and the disruption of shipping through the Strait of Hormuz. The meetings in Ottawa focused on the impact of constrained oil and natural gas flows from the Persian Gulf, as well as Canada's potential to expand its role as a major global energy exporter during a period of heightened supply uncertainty .

As countries re-examine their energy policies, Canada has a "once-in-a-generation opportunity" to move from being a country with significant and varied energy resources to being a major exporter, Birol said . Tehran's closing of the Strait of Hormuz has choked off around 20 per cent of the world's supplies since the United States and Israel began their bombing campaign against Iran on Feb. 28. The crisis has ripped more than 14 million barrels a day from the world market, and 110 billion cubic metres of gas .

India's Energy Lifeline Hangs in the Balance

At least 28 ships, including vessels carrying crude oil, liquefied petroleum gas (LPG), and LNG supplies to India, are currently stranded near the Strait of Hormuz, the Indian government has confirmed . OilPrice.com reported that the war in the Middle East has stranded much of the energy supplies typically going to India via the Strait of Hormuz, creating a crunch in oil and gas supply in the world's third-largest crude oil importer, which also depends on LPG for most of its cooking fuel .

The Economic Times reported that over the past few days, eight India-flagged vessels have transited the Strait of Hormuz. The ships that made it through include two LPG carriers, which are expected to arrive in India on Tuesday and Wednesday. Early last week, two other India-flagged vessels carrying LPG passed through the Strait of Hormuz close to the Iranian coastline, in a sign that Iran is allowing some Indian vessels to transit the world's most vital chokepoint for energy flows .

AI Infrastructure Boom Continues Despite Energy Uncertainty

CNBC reported that data center operator IREN announced a partnership with semiconductor giant Nvidia. NVIDIA and IREN intend to support deployment of up to 5 gigawatts of NVIDIA DSX-aligned AI infrastructure across IREN's global data center pipeline over time . As part of the partnership, IREN issued to NVIDIA a five-year right to purchase up to 30 million shares of ordinary stock at an exercise price of $70 per share, resulting in a right to invest up to $2.1 billion, subject to certain conditions including regulatory .

In a separate release, IREN said it signed a five-year deal worth $3.4 billion to provide Nvidia with access to managed GPU cloud services "for its internal AI and research workloads." The deployment will be at IREN's existing data centers in Childress, Texas .

Texas Pushes Forward on Gas Capacity Despite Market Volatility

According to Utility Dive, NRG Energy is poised to complete 415 MW of new simple-cycle gas capacity at its TH Wharton power plant in Houston later this month. The two-unit TH Wharton addition is the first of three projects NRG is developing with backing from the Texas Energy Fund, a state-backed initiative that provides below-market financing for firm generation to serve surging load growth in the Electric Reliability Council of Texas territory .

The fund executed a $216 million loan for the TH Wharton project with a nameplate capacity of 456 MW last year. The fund is also supporting the construction of a 721-MW unit at NRG's Cedar Bayou power plant and a 455-MW capacity addition at its Greens Bayou power plant .

The volatile energy landscape continues to reshape global markets, with geopolitical tensions in the Strait of Hormuz creating both crisis and opportunity. While federal investigators probe potentially illegal trading activity, energy-importing nations scramble for alternative supplies and producers like Canada position themselves to fill the gap left by Middle Eastern disruptions.