US-Iran Conflict Triggers Hedge Fund Bullish Bets on Crude Oil

The ongoing conflict between the United States and Iran has intensified, leading to increased concerns about energy shipments through the Strait of Hormuz. Hedge funds have responded by taking their most aggressive positions in crude oil since May, with net long positions in Brent crude rising by 37,837 lots to 261,435 lots.

According to data from Intercontinental Exchange (ICE) Futures Europe and the U.S. Commodity Futures Trading Commission (CFTC), fund managers have increased their bets on further oil price gains. This is largely due to concerns that energy shipments through the Strait of Hormuz could face prolonged disruption, with shipping activity through the strait having rapidly deteriorated.

Oil prices surged for the week, with Brent crude futures rising 0.35% to $95.85 per barrel, breaking above the interim high set on July 24. West Texas Intermediate (WTI) was trading near $92 per barrel, up more than 9% for the week.

Net long positions in diesel have climbed to their highest since March, and U.S. retail diesel prices hit a record high of $5.85 per gallon on Thursday. Simultaneous wars in the Middle East and Ukraine are further squeezing global fuel supplies.