Oil market liquidity has fallen sharply amid the US-Iran war, with Brent crude open interest dropping to its lowest level since August as traders withdraw from highly volatile conditions linked to the Strait of Hormuz blockade. The prolonged disruption has cut off large volumes of Persian Gulf oil, intensifying price swings, including a 12% Brent drop after shifting peace expectations. Aldo Spanjer of BNP Paribas said the market has become “close to untradeable” due to repeated stop-loss trigger

Oil market liquidity has fallen sharply amid the US-Iran war, with Brent crude open interest dropping to its lowest level since August as traders withdraw from highly volatile conditions linked to the Strait of Hormuz blockade. The prolonged disruption has cut off large volumes of Persian Gulf oil, intensifying price swings, including a 12% Brent drop after shifting peace expectations. Aldo Spanjer of BNP Paribas said the market has become “close to untradeable” due to repeated stop-loss triggers and unpredictable headlines. Market participants are increasingly limited to hedging, algorithmic trading, and reduced-risk positioning, according to Rebecca Babin of CIBC Private Wealth Group and Scott Shelton of TP ICAP.