Roughly $580 million worth of oil futures changed hands in a single minute early Monday morning, only about 15 minutes before President Trump posted on Truth Social that the U.S. had been engaged in “productive conversations” with Iran to end the war.
Now Nobel Prize-winning economist Paul Krugman is calling what he sees: treason.
“We have another word for situations in which people with access to confidential information regarding national security — such as plans to bomb or not to bomb another country — exploit that information for profit,” Krugman wrote in a Substack post Tuesday. “That word is treason.”
Iran’s parliament speaker, Mohammad-Bagher Ghalibaf, denied that any negotiations with Washington had taken place, calling the claim “fakenews” used to “manipulate the financial and oil markets.” Stocks pulled back slightly and energy prices stymied their free-fall on his statement, but ultimately traders seemed to trust that Trump was telling the truth about winding down the war.
Rory Johnston, an oil market analyst, said the pattern has been hard to ignore even without a smoking gun.
“Everyone—every analyst, every oil trader—has been questioning downward pressure on prices,” he told Fortune. He added that whether or not there’s been direct market manipulation by Washington, the administration’s jawboning has spooked participants out of trading where physical fundamentals would otherwise push prices. “I think that probably goes a long way towards it.”
The White House did not immediately respond to Fortune’s request for comment.
The suspicious trading activity
The trades involved roughly 6,200 Brent and West Texas Intermediate futures contracts that were sold between 6:49 and 6:50 a.m. New York time. Trading volumes for S&P 500 futures also spiked moments later, meaning that any potential insider got upside on both ends. After Trump announced the pause of his ultimatum at 7:04 a.m., there was a sharp selloff in oil markets and a jump in equities; precisely the outcome someone holding those positions would have wanted. It is not known whether one entity or several were behind the trades.
Krugman argued that insider trading on national security decisions is illegal for reasons besides unfairness: it presents a strategic vulnerability. Trading on classified information effectively broadcasts government plans to foreign adversaries, he wrote, adding that “who needs to bribe agents within the government” when you can infer the same intelligence from futures markets.
He also raised an unsettling question: whether the possibility of insider profits may be influencing the policy decisions themselves.
“Are decisions about war and peace in part serving the cause of market manipulation rather than the national interest?” he wrote. “If you dismiss this as unthinkable, you just haven’t been paying attention.”
Krugman joins a chorus of Trump critics and investors who called foul on the move Monday. Trump had spent the weekend threatening to bomb Iranian power plants unless Tehran reopened the Strait of Hormuz within 48 hours. His Monday morning reversal, which he attributed to ongoing talks, blindsided markets—and, apparently, Iran.
As for whether insiders are profiting from advance knowledge of policy announcements, Johnston said it “would not surprise me,” but but stressed he didn’t have direct evidence.
