Traders Lose $10B After Iran Conflict Disrupts Gulf Oil

A study by consulting firm Oliver Wyman found that major U.S. commodity trading houses lost more than $10 billion at the start of the conflict in Iran after shipping through the Arabian Gulf and the Strait of Hormuz was severely restricted, sending oil prices above $100 a barrel and triggering large margin calls.

The firm found more than 100 fuel tankers were unable to move, creating delivery problems for traders with cargoes at sea. Many traders use short futures positions to hedge physical cargoes; when Brent and U.S. crude spiked, those short positions produced immediate margin calls that required quick cash postings.

Alexander Franke, head of risk and trading at Oliver Wyman, described the initial losses as “billions of dollars” and said most participants were surprised because markets had been leaning toward lower prices before the fighting began.

Physical traders also had to buy replacement cargoes at higher prices when barrels sold for later delivery could not be shipped, the study found. Some firms recovered part of their initial losses after markets eased, but the first impact was severe.

Oil futures jumped over the weekend as U.S. naval preparations and thin Gulf traffic tightened supply. U.S. crude for May delivery rose about 8% to roughly $104.40 a barrel; Brent for June delivery climbed more than 7% to about $102.51. Shipping data showed three supertankers transited the route on Saturday compared with more than 100 daily before the fighting; each supertanker can carry about 2 million barrels.

U.S. Central Command announced it would block maritime traffic entering and leaving Iranian ports and apply the measure impartially to vessels of all nations. President Donald Trump had threatened to block the Strait of Hormuz after talks in Islamabad failed to produce an agreement. Iranian officials linked safe passage to their approval.

Vice President JD Vance, who led the U.S. delegation, attributed the talks’ failure to Iran’s refusal to provide an “affirmative commitment” not to seek a nuclear weapon. Iran’s parliamentary speaker said the U.S. had not gained the delegation’s trust in that round of negotiations.

Oliver Wyman reported that industry margins have already fallen from peak years. Gross margins for trading houses slipped to $92 billion last year from a $145 billion peak in 2022. Metals trading profits rose about 20% while oil desk profits fell roughly 15%. The report also noted that expenses tied to trading operations and infrastructure have climbed more than 30% since 2021.

The firm estimated baseline annual earnings for the industry at $90 billion to $110 billion going forward, excluding additional losses from geopolitical disruptions. Traders now face immediate cash demands from margin calls and the operational task of rerouting cargoes and meeting contractual delivery obligations while Gulf traffic remains thin.