Money managers have increased bullish wagers on crude oil to the highest levels in months, with renewed geopolitical risk tied to Iran pushing energy markets back toward supply-focused trading, according to Bloomberg.
Hedge funds increased net-long Brent crude positions by more than 31,000 contracts in the week ending February 3, lifting total long positions to nearly 278,000 lots, the highest level in roughly ten months. Data from the Commodity Futures Trading Commission shows that money managers also raised net-long positions in WTI crude to a six-month high, reversing the defensive stance that dominated late 2025.
The shift marks a clear turn from December, when hedge funds reduced exposure amid concerns over excess supply, soft macroeconomic data, and uncertainty over OPEC+ discipline. More recent positioning appears to suggest that traders could again be prioritizing geopolitical risk premiums over inventory trends or near-term demand signals.
Bloomberg data shows hedge funds are adding new long positions while also cutting back on short bets, pointing to a broader return to bullish crude exposure rather than a reshuffling of existing trades. The increase has been strongest in Brent contracts, which tend to react more directly to Middle East supply risks than U.S.-based oil benchmarks.
Attention has returned to Iran after the U.S. announced new sanctions targeting entities and oil tankers linked to Tehran’s shadow export network. The measures reinforced concerns around enforcement risk and potential disruptions to Iranian crude flows, which have been moving largely outside formal markets.
Talks between U.S. and Iranian officials in Muscat concluded with agreement to continue discussions, with Iran’s foreign minister Abbas Araghchi stating that the negotiations were limited to nuclear issues. Markets, however, showed little sign of pricing in near-term sanctions relief, treating the talks as a stabilizing channel rather than a breakthrough.
With diplomatic uncertainty persisting and sanctions pressure intensifying, hedge fund positioning suggests that traders are once again assigning greater weight to Middle East supply risk as a driver of oil prices.
By Alex Kimani for Oilprice.com
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