Hedge funds have rapidly increased bullish positions on Brent crude oil, reaching levels not seen in six years, as geopolitical tensions in the Middle East escalate. The surge in optimism comes amid a volatile week for crude markets, driven by concerns over potential supply disruptions.
Money managers boosted net-long Brent crude positions by more than 31,000 contracts in the week ending February 3, bringing the total to nearly 278,000 lots – the highest in roughly ten months, according to data analyzed from the Commodity Futures Trading Commission. Simultaneously, net-long positions in West Texas Intermediate (WTI) crude as well rose to a six-month high, reversing a defensive posture observed in late 2025.
This shift represents a significant departure from December, when hedge funds reduced their exposure to crude oil due to concerns about oversupply, weak macroeconomic data, and uncertainty surrounding OPEC+ production policies. The current market activity suggests traders are now prioritizing geopolitical risk premiums over factors like inventory levels and short-term demand signals.
Bloomberg data indicates that funds are not only establishing new long positions but also reducing short bets, signaling a broader return to bullish sentiment regarding crude oil. The increase in bullish activity has been particularly pronounced in Brent contracts, which are more sensitive to Middle East supply risks than U.S.-based benchmarks.
Renewed attention on Iran follows the U.S. Announcement of new sanctions targeting entities and oil tankers linked to Tehran’s shadow export network. These measures have reinforced concerns about enforcement risks and potential disruptions to Iranian crude flows, which largely operate outside of formal markets. Talks between U.S. And Iranian officials in Muscat concluded with an agreement to continue discussions, though the negotiations remain focused on nuclear issues, according to Iran’s foreign minister Abbas Araghchi.
The price of Brent crude has surged in recent weeks, surpassing $100 a barrel for the first time since 2022, fueled by conflict in the Middle East and concerns over the potential near-closure of the Strait of Hormuz. Brent crude was trading near $60 a barrel in January, but climbed to $119.50 before settling just over $99 a barrel on March 10, 2026.
Oil producers are responding to the price spike by increasing hedging activity rather than expanding drilling operations. The near-closure of the Strait of Hormuz, a critical shipping channel for global crude oil and LNG exports, is a primary driver of the price increases, with roughly a fifth of global exports normally passing through the 3.2-kilometer-wide waterway.
The U.S. Commodity Futures Trading Commission temporarily suspended the publication of its commitments of traders reports in October 2025 due to the federal government shutdown, reducing market transparency. While reports for Brent and European gasoil continued to be published by ICE Futures Europe, this provided an incomplete picture of market positioning.
