The Oil Shock That Caught Hedge Funds Off Guard

2026-03-12

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In this episode of the Market Maker Podcast, we break down a rare six-sigma oil market shock - a move so extreme it statistically should happen only once every four million years. Crude oil surged from around $70 to $120 during geopolitical tensions before rapidly reversing, catching some of the world’s largest hedge funds off guard.We discuss what drove the volatility, why hedge funds lost billions, and how oil prices feed directly into inflation, interest rates, and global macro markets.(00:00) I...

In this episode of the Market Maker Podcast, we break down a rare six-sigma oil market shock - a move so extreme it statistically should happen only once every four million years.

Crude oil surged from around $70 to $120 during geopolitical tensions before rapidly reversing, catching some of the world’s largest hedge funds off guard.

We discuss what drove the volatility, why hedge funds lost billions, and how oil prices feed directly into inflation, interest rates, and global macro markets.

(00:00) Introduction

(01:20) The Oil Price Shock Explained

(05:23) The “Six Sigma” Market Move

(07:20) The Realities of Trading Commodities

(09:18) How Trade is Impacted by War

(14:24) The New Iranian Supreme Leader

(16:45) Strategic Oil Reserves & Market Impact

(29:10) Oil, Inflation & Interest Rates

(32:29) Hedge Funds Feel the Pain

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