Why Hedge Funds Piled Into Brent Crude at the Fastest Pace in a Decade

The same day, the U.S. military conducted a second round of strikes against Iranian positions in retaliation for the attacks on commercial vessels . CENTCOM announced it had hit more than 80 targets in Iran, including air-defense systems and boats belonging to the Islamic Revolutionary Guard Corps .

Brent crude jumped 5.2% to $78.02 per barrel as the market repriced the resumption of full conflict .

July 9-11: Escalating military strikes

The U.S. conducted multiple consecutive nights of strikes on Iranian coastal targets. A third wave of strikes was reported by July 9, with operations continuing through at least six nights . Iran retaliated by expanding attacks on Gulf states . Air-raid sirens were activated in Bahrain and Kuwait as Iran launched retaliatory missile attacks .

July 12: Iran claims closure of the Strait of Hormuz

Over the weekend of July 11-12, fresh U.S. airstrikes prompted Tehran to claim it had closed the Strait of Hormuz to commercial shipping . The U.S. rejected the claim, with President Trump insisting the waterway remained open . Iran's Islamic Revolutionary Guard Corps declared the strait would remain sealed "until further notice" .

The resulting uncertainty caused shipping traffic through the chokepoint to plummet. Daily ship traffic through the strait, which normally carries about a fifth of the world's oil, dropped to only 14 ships on Sunday, July 12, according to maritime data firm Kpler . Normally, more than 130 vessels pass through the waterway each day .

Trump also reimposed a U.S. naval blockade of Iran, announcing: "We are reinstating the Iranian blockade, so named because it is only stopping Iran's ships or customers from entering or leaving" .

July 13: Oil prices surge

On Monday, July 13, oil prices surged dramatically. Brent crude jumped 9.6% to $83.30 per barrel — its best single-day performance since May 2020 . West Texas Intermediate (WTI) crude gained 9.4% to settle at $78.14 . Shares of major oil companies also rose, while stock markets fell on fears of a wider regional conflict .

Price action and positioning context

In the calm before the ceasefire broke, Brent crude had fallen back toward pre-war levels near $72. After the ceasefire collapse, prices surged past $78 on July 8 , then to $83-85 by July 13-14 .

The front-month Brent contract traded at an $8.92 premium over six-month deferred delivery, its largest premium since June 10, reflecting acute near-term supply scarcity fears .

The positioning levels echoed the earlier war-driven buying from March 2026. At the outset of the original U.S.-Iran conflict, hedge funds had turned most bullish on Brent since 2020, increasing net-long positions by 65,438 lots to 351,032 in the week ending March 10 . The July wave of buying was even more extreme in its velocity: net long positions surged by over 75,000 contracts in a single week, the largest weekly increase since 2016 .

Iran's retaliation threats

As the crisis deepened, Iran threatened to retaliate against regional infrastructure, raising fears of a wider war that could disrupt energy facilities and shipping lanes across the Gulf . The U.S. and Iran traded fresh attacks in and around the Strait of Hormuz, with Iran expanding strikes on Gulf states following U.S. attacks .

The combination of a collapsed diplomatic track, a contested closure of the world's most critical oil chokepoint, and the prospect of a wider regional conflict created a supply-risk environment that hedge funds had not seen in nearly a decade — and they placed their biggest bets accordingly.