Investors rushed to lock in profits after oil prices surged this week as conflict in the Middle East flared up again. Israeli and US air strikes on Iran, followed by Tehran's response, triggered sharp volatility in global energy markets.
Monday saw record trading volume as 12.7 million energy futures and options contracts changed hands on the Intercontinental Exchange (ICE). The surge came as crude prices surged to multi-month highs in the session.
The global benchmark for refined oil products, ICE Low Sulphur Gasoil, recorded a record 1.3 million contracts traded, surpassing the previous record set on June 13, 2025, when the Israel-Iran conflict was also at its peak.
Brent futures traded at 4.8 million contracts, the highest since June 2025.
In the United States, diesel futures jumped nearly 12% at the close on Monday, outpacing gains in crude and gasoline, which rose more than 6% and nearly 4% respectively. Diesel is seen as the most sensitive to tensions in the Middle East as the region is a major supplier of the fuel.
At the same time, global diesel inventories have been sharply reduced after high demand for heating and power generation during an extreme winter.
The price increase was also driven by concerns about the safety of shipping lanes in the Strait of Hormuz, which handles about 20% of the world's oil supply.
West Texas Intermediate (WTI) jumped 8% at the market open, while Brent rose 11% in early trade.
In an environment of high volatility, hedging activity has increased sharply.
US oil producers have been quick to work with banks and trading houses to lock in prices and reduce volatility risk. Instruments such as swaps have become the go-to option because they allow producers to convert sudden price spikes into fixed prices based on futures contracts.
The United States currently produces around 13.73 million barrels of crude oil per day, according to the latest official data.
With geopolitical tensions still lingering, energy markets are expected to remain volatile in the near term, with trading flows and hedging activities continuing to be the main drivers of price movements.
