The head of CME Group has warned the Trump administration it will risk a “biblical disaster” if it attempts to lower oil prices by intervening in derivative markets during the war with Iran.
Terry Duffy, the chief executive of CME Group, which runs the exchange where US oil futures trade, told a conference this week that it would erode market confidence if the US government stepped into the futures market in a bid to curb the rise in crude.
“Markets do not like it when governments intervene in pricing,” Duffy told the conference in Boca Raton, Florida. Such a move would risk a “biblical disaster” if investors lost confidence in markets to set the price of critical commodities, he said.
Duffy’s comments followed a report by Reuters that suggested the US Treasury was considering measures to lower oil prices, including intervention in futures markets.
The Trump administration on Wednesday announced the release of millions of barrels of oil from its strategic reserve in a bid to prevent an oil price shock — its latest attempt to contain the crude rally.
Analysts have said the administration could pursue other options to shelter US consumers, such as temporarily suspending federal taxes on gasoline, relaxing environmental rules on fuel or temporarily banning US oil exports.
But wild oil price moves in recent days have prompted speculation among energy traders that the Treasury may have already intervened in futures markets. On Monday, Brent crude oil leapt to almost $120 a barrel before reversing sharply to fall back below $100.
Tim Skirrow, head of derivatives at Energy Aspects, said the consultancy had been fielding calls this week on whether the government was behind a series of large unexplained trades in recent days.
“We were being pushed by clients as to who the big seller was,” Skirrow said.
“The speculation was that it could be from the US Treasury,” he added, noting that the government has previously intervened in other markets, such as currencies.
Rapidan Energy Group, a consultancy founded by former White House energy adviser Bob McNally, said this week that while such a move by the government would be “unprecedented”, it was clear “the idea of the US Treasury selling front-month crude futures” was getting “more attention than usual”.
“Given the current panic situation,” Rapidan analysts wrote in a note for clients, “we cannot completely rule it out”.
The Treasury declined to comment on the speculation. A person familiar with Treasury secretary Scott Bessent’s thinking said the agency had not intervened in oil markets.
A spokesman at the Department of Energy said it had not been involved in oil derivatives trading or advising other arms of the government on such a course of action.
Other moves by government officials have raised eyebrows in oil markets this week.
Oil fell sharply on Tuesday after a post on X by energy secretary Chris Wright that surprised traders by saying the US Navy had escorted an oil tanker through the Strait of Hormuz. The message was deleted minutes later, and the White House later denied that the navy had escorted a ship through the waterway.
John Evans, an analyst at the PVM oil brokerage in London, wrote on Thursday that it was unclear if Wright’s post was “another case of total incompetence or more seriously, shenaniganry”.
Wright said on Thursday that naval escorts were unlikely to begin before the end of the month.
