I feel so sorry for oil traders these days.
Since February 2026, oil prices in the commodities
market—particularly WTI and Brent crude—have been swinging wildly. And I can
only imagine what oil traders do each morning.
They wake up, grab their smartphones, and check the news to
see whether anything crazy happened while they were asleep. Then they turn on
CNBC or another business channel. Finally, they check their blood pressure to
see which one is rising faster: their pulse or the price per barrel.
“Good morning, honey. Did you sleep well?”
“I did. Then I checked the oil price.”
“How bad is it?”
“Bring me my blood pressure cuff. And cancel the vacation.”
I am joking about the blood pressure cuff. But I am not
joking about the prices.
On February 27, 2026, the last trading day before the United
States and Israel launched strikes on Iran, the reported spot price of Brent
crude was $71.32 per barrel. WTI crude stood at $66.96 per barrel.
By April 7, Brent’s spot price had climbed to $138.21 per
barrel. WTI had reached $114.58 per barrel.
That was an increase of approximately 94% for Brent and 71%
for WTI from their February 27 levels.
I would call that a wake-up call. But it assumes the trader
slept.
Picture him staring at his screen.
“Brent was $71.32. Now it’s $138.21?”
“Yes.”
“And WTI went from $66.96 to $114.58?”
“Yes.”
“Is this a market report or a hospital bill?”
The answer, for a trader on the wrong side of those moves,
might be both.
The price jump did not come out of nowhere. On February 28,
the United States and Israel launched military strikes on Iran. Attacks on oil
infrastructure and the halt in tanker traffic through the Strait of Hormuz
rattled the market. The International Energy Agency reported that Brent futures
climbed close to $120 per barrel during the turmoil.
The Strait of Hormuz is a narrow waterway, but its
importance to the oil market is enormous. A serious disruption there raises
questions about whether oil can reach buyers, whether tankers can travel
safely, and how much it will cost to insure and transport shipments.
I imagine an oil trader looking at a map and asking, “How
can one narrow waterway cause this much trouble?”
The market answers: “Keep watching.”
And he does. Every morning. Every night. Probably during
dinner too.
“Can you put your phone away?” his wife asks.
“I can’t.”
“Why?”
“Because a tanker just turned around.”
“We’re eating chicken.”
“I know. But my retirement account is eating me.”
The trader is not merely watching a barrel of oil. He is
watching military announcements, diplomatic meetings, tanker movements, and the
words of politicians who may change their minds before he finishes his coffee.
A headline hints at peace. Prices can fall.
A new attack raises fears about supply. Prices can climb.
Another official promises a solution. Traders try to decide
whether to believe him, doubt him, or wait for the next official to contradict
him. By the time they agree on an answer, the price may already have moved.
And the market did not simply go up and stay there. After
Brent’s spot price reached $138.21 on April 7, it fell to $98.63 on April 17,
when Iran declared the Strait of Hormuz open. That was a drop of $39.58 per
barrel in 10 days.
The trader who bought near the top may have had a difficult
conversation with his boss.
“You said oil was going higher.”
“It was.”
“Then why did it fall nearly $40?”
“Because the news changed.”
“Did you not see that coming?”
“If I could see everything coming, I wouldn’t be working for
you.”
Of course, the exchange is imaginary. The price swing is
not.
And to be clear, those April figures are spot prices, while
the International Energy Agency’s near-$120 figure refers to futures. They are
different price measures. I am not using them as if they were the same number.
I am using them to show how violently the oil market responded to events.
WTI and Brent also had their own reasons for moving
differently. WTI is closely associated with the U.S. oil market. Brent is a
major international benchmark. Both respond to world events, but they do not
always rise or fall by the same amount. In early 2026, the gap between Brent
and WTI futures widened as the conflict disrupted oil flows, according to the
U.S. Energy Information Administration. Brent surpassed $100 per barrel on
March 12.
So the trader has another problem. It is not enough to say,
“Oil is going up.” He must also ask which oil price, which contract, and by how
much.
“Buy Brent?”
“Maybe.”
“Buy WTI?”
“Maybe.”
“Sell both?”
“Maybe.”
“What do we know for sure?”
“That breakfast is getting cold.”
The numbers from April and May tell me just how much
excitement this market was serving. The Energy Information Administration found
that Brent’s average daily price swing during those months in 2026 was
approximately $4 per barrel. During the same months in 2025, it was about $1
per barrel.
That is four times the average daily swing.
A $4 move may not sound like much if you are thinking about one
barrel. But multiply that change by 10,000 barrels, and the value of the
position moves by $40,000. Multiply it by 100,000 barrels, and the move is $400,000.
The actual gain or loss depends on the position and any
protection the trader has arranged. But I understand why someone carrying a
large position might look at a $4 swing and lose interest in a relaxing lunch.
By October, traders still had reasons to keep their phones
close. On October 23, Brent futures settled at $116.72 per barrel, up $3.55
that day. WTI futures settled at $103.27, up $3.80. Reuters reported that
attacks involving the Houthis and concerns about disruptions in the Middle East
helped drive the rise.
That day alone, a $3.80 move in WTI represented $380,000 across
a position covering 100,000 barrels, before accounting for the details of the
trade.
“Did you make money today?”
“Yes.”
“Wonderful. Are you happy?”
“I’ll tell you after I see what happens tonight.”
I can already hear someone objecting. “Why feel sorry for
oil traders? Aren’t they trying to make money from this chaos?”
Yes. Many are. And I am not asking anyone to organize a
charity dinner for a trader who made a fortune betting on the right price move.
Some traders profit when prices rise. Others profit when prices fall. Companies
also use futures to manage their exposure to changing fuel costs or oil
revenue. The market has room for clever people, cautious people, gamblers, and
people who discover too late which category they belong to.
But the trader is not the only person affected when crude
prices surge. Higher oil costs can work their way through the economy, although
the effect is not instant or identical everywhere.
The truck driver sees the diesel bill. The airline faces
higher fuel costs. The family filling its car wonders why a tank of gas
requires the kind of planning once reserved for a weekend trip.
According to the Associated Press, U.S. gasoline averaged
approximately $2.98 per gallon before the war and had risen to $4.29 per gallon
by October 26. Diesel increased from approximately $3.76 to $6.35 per gallon
over that period.
That is where my sympathy becomes complicated.
The trader can make money from a price swing. The driver who
needs fuel to get to work usually cannot.
One person watches a screen and says, “The market is on
fire.”
Another watches the pump and says, “So is my paycheck.”
And if traders think oil cannot get any stranger, I have one
date for them: April 20, 2020. That day, the expiring May WTI futures contract
closed at −$37.63 per barrel. Demand had collapsed during the COVID-19
pandemic, storage was scarce, and holders of that contract faced the prospect
of taking delivery of oil.
Not every barrel in the world had a negative price. But that
particular contract did.
In 2020, traders worried about where to put oil. In 2026,
they worried about whether oil could move safely through a vital waterway.
Either way, a confident prediction could become an expensive memory.
So, yes, I feel sorry for oil traders these days. Some of
them may be making money. Some may be losing it. But when a barrel can climb
from $71.32 to $138.21, then drop below $100, I understand why their morning
routine begins with the news.
And if the next headline is bad enough, I suspect it ends
with a call to the doctor.
For readers interested in a separate line of thought,
the titles in my “Brief Book Series” are now available on Amazon. Read them here on Amazon, Walmart, and Google Books.
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