Oil trading volumes on IG almost double amid renewed US-Iran tensions

UK traders jumped back into oil markets amid renewed tensions, with trading activity on 8th July almost doubling compared with the previous day, according to data from investing and trading platform, IG.

Client activity surged after President Donald Trump declared the ceasefire framework over, raising fears of potential supply disruptions through the Strait of Hormuz and pushing crude oil prices sharply higher.

IG trading data (8 July vs 7 July):

• Oil trades jumped 83% while the number of clients trading oil increased 61%.

• Notional value traded almost doubled, rising 89% as traders reacted to the heightened risk of disruption to global oil supplies.

• Positioning was almost evenly split, with 49% of trades opening long positions versus 51% short, although the proportion of long trades increased markedly from 43% the previous day.

Commenting on the data, Chris Beauchamp, Chief Market Analyst at IG, said: “The escalation in military activity in the Gulf and Trump’s declaration of the MOU as ‘over’ catapulted oil back on to the agenda for traders, and IG duly saw a concomitant increase in client activity in the asset. Notably, as well as more volume, the balance between longs and shorts was evenly-split – half of those trades seem driven by an expectation of a return to full-blown military action, while the other half expected both sides to head back to the negotiating table.”