US Allegedly Manipulating Oil Prices via Futures Market Amid Strait of Hormuz Closure
Despite the prolonged closure of the Strait of Hormuz and severe global supply shortages, oil prices have not spiraled as expected, hovering around $100. This anomaly has sparked theories that the US Treasury is manipulating the market through 'paper oil'—selling massive quantities of oil futures to suppress current prices. A Reuters report initially hinted at such measures by the White House to combat rising energy costs during the ongoing conflict. The strategy involves selling futures contracts at lower prices, betting that prices will stabilize or drop by the settlement date if the US prevails in the war. However, as the conflict drags on and physical shortages worsen, the US administration, under President Donald Trump, has resorted to releasing Strategic Petroleum Reserves and issuing sanctions waivers for Russian and Iranian oil. Analysts now question whether active manipulation via futures markets is occurring to buy time and prevent economic catastrophe, creating a disconnect between physical scarcity and financial market pricing.
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US Allegedly Manipulating Oil Prices via Futures Market Amid Strait of Hormuz Closure
Despite the prolonged closure of the Strait of Hormuz and severe global supply shortages, oil prices have not spiraled as expected, hovering around $100. This anomaly has sparked theories that the US Treasury is manipulating the market through 'paper oil'—selling massive quantities of oil futures to suppress current prices. A Reuters report initially hinted at such measures by the White House to combat rising energy costs during the ongoing conflict. The strategy involves selling futures contracts at lower prices, betting that prices will stabilize or drop by the settlement date if the US prevails in the war. However, as the conflict drags on and physical shortages worsen, the US administration, under President Donald Trump, has resorted to releasing Strategic Petroleum Reserves and issuing sanctions waivers for Russian and Iranian oil. Analysts now question whether active manipulation via futures markets is occurring to buy time and prevent economic catastrophe, creating a disconnect between physical scarcity and financial market pricing.
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