$1B oil bets align with US-Iran ceasefire, impacting WTI price expectations

A series of $1 billion bearish bets on oil prices coincided with a US-Iran ceasefire announcement. WTI Crude Oil hitting $160 in April sits at 1% YES, down from 3% a week ago.

The timing of these trades suggests traders anticipated the ceasefire’s impact on oil prices before it was public. The ceasefire, mediated by Pakistan, Türkiye, and Egypt, reopened the Strait of Hormuz, which carries a significant portion of global oil trade. This reopening likely drove the sharp decline in oil prices. The probability of WTI hitting $160 is now 1% across all April sub-markets.

Actual USDC spent in these markets is just $316 daily, despite face value showing $20,174/day. This is a thin market where a few large trades can move prices significantly. The order book depth shows it takes $2,188 to move the price 5 percentage points, making it vulnerable to large swings from any single participant.

These $1 billion bets aligning with the ceasefire announcement point to possible foreknowledge of geopolitical events, directly affecting trader expectations for oil prices. At 1¢, a YES on WTI hitting $160 pays $1, a 100x return. But for that to pay off, you’d need a sharp escalation in tensions or supply disruptions within the next 10 days.

Watch for developments in US-Iran talks led by Vice President JD Vance or unexpected military actions that could disrupt oil flows. Either could shift the current market pricing.