Hedge funds increase short bets on Brent crude oil to $18B, highest in 10 years

Hedge funds are betting against oil with a conviction not seen in a decade. Short positions on ICE Brent crude futures and options have ballooned to $18 billion, the highest level in ten years, as money managers pile into bearish bets on the global benchmark.

The scale of the move is striking. Short positions quadrupled from 40 million barrels at the end of March 2026 to 140 million barrels by early June, the highest level recorded since mid-January.

What’s driving the bearish stampede

Two forces are converging to make oil traders deeply pessimistic: easing geopolitical tensions in the Middle East and expectations for increased global supply.

OPEC+ supply dynamics sit at the center of this shift. Investors are positioning for potential changes in the cartel’s production strategy, and the consensus view among money managers seems to be that more barrels are coming to market, not fewer.

In the week ending June 2, 2026, hedge funds sold an additional 26 million barrels equivalent in Brent positions. That continued a pattern observed in eight of the nine preceding weeks.

Short-only Brent futures climbed 16,922 contracts to reach 130,019 as of May 27, 2026, marking the highest level since October.

Putting the numbers in context

The current short buildup rivals the record set in the week ending December 2, 2025, when ICE Brent short contracts hit 174,703.

What this means for investors and the broader market

The real risk sits with the short sellers themselves. A decade-high short position means a decade-high level of vulnerability to any bullish catalyst. An unexpected OPEC+ production cut, a renewed geopolitical crisis, or even a surprise demand surge from China could force rapid unwinding of these positions.

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