Oil Market Liquidity Dries Up as Traders Sit Out War Volatility

Oil market liquidity has evaporated since the start of the US-Iran war, amplifying price moves in a benchmark seen as a bellwether for the global economy.

Total Brent futures open interest, a proxy for money in the market, plunged to the lowest level since August as traders increasingly shy away from the volatility tied to the Middle East conflict. The shrinking participation comes as the longest blockade of the Strait of Hormuz on record cuts off hundreds of millions of barrels of Persian Gulf oil from global markets, sparking an energy crisis.