Global oil markets are witnessing an unprecedented exodus of investors this year as extreme price swings have created chaos that traders say has become impossible to navigate.
Market liquidity – essentially how easily buyers and sellers can find each other – has deteriorated at the fastest rate ever recorded, according to new data. The measure reflects both trading volume and open interest in the market.
Data from LSEG shows that open interest, which tracks how many Brent crude futures contracts investors currently hold, has dropped nearly 17% this year. This marks the steepest decline since records began in 2009.
Market participants point to the constant shifts in political messaging regarding Iran as a major factor driving the instability. The pattern of escalating tensions followed by sudden claims of potential peace deals has created exhaustion among traders.
“People are exhausted by this chaos. They want this to be over. You cannot trade futures without being constantly burned in an environment when the messaging changes every other hour,” said a senior executive from a major trading desk, who requested anonymity due to the sensitive nature of the topic.
Oil prices dropped nearly 3% on Friday to their lowest point in almost two months after U.S. President Donald Trump canceled planned strikes on Iran Thursday, stating that a peace agreement was within reach.
The August Brent futures contract showed the lowest open interest levels since last July when it became the most actively traded contract at the beginning of this month, with 534,227 lots.
When market liquidity thins out, traders must often accept prices much higher or lower than they would prefer due to fewer willing trading partners. This dynamic creates larger price movements that increase both potential profits and losses.
Jeffrey Currie, former commodities chief at Goldman Sachs, argued this week that oil prices haven’t returned meaningfully above $100 per barrel recently not because of abundant supply, but due to what he termed “capital aversion.” Supply has actually been severely restricted by the near-closure of the Strait of Hormuz.
“Policy uncertainty has made oil too volatile to hold,” Currie wrote on X on June 10.
“2026 year-to-date open interest decline is the worst on record. Unlike 2022, there’s no rates shock or sanctions forcing the exit. This is capital aversion,” added Currie, who now serves as a senior adviser to alternative asset manager Carlyle.
