Oil prices fell on Monday after US President Donald Trump called on other countries to help safeguard the Strait of Hormuz.
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Oil moves fueled by news of the Iran war are drawing retail investors into the world’s most traded commodity, further fueling volatility.
Retail investors have poured record sums into oil-linked exchange-traded funds in recent weeks as prices have soared amid the Middle East conflict and fears of prolonged disruptions to crude flows through the Strait of Hormuz.
The rush has led some analysts to draw parallels with past retail trading frenzies in stocks like GameStop or commodities like silver, indicating that the crude oil market could be exposed to “meme-style” trading.
“Oil is definitely a retail ‘meme theme’ now. Retail investors have been piling into major oil-only ETFs since the start of the conflict with Iran,” said Viraj Patel, global macro strategist at Vanda Research.
Net retail purchases of oil ETFs hit a record $211 million on March 12, surpassing the previous peak seen during the market turmoil in May 2020, according to data from Vanda Research.
After reaching a record $42 million on March 6, the popular United States Oil Fund (USO) posted its third-best day for retail inflows with $32 million last Thursday.
Strategic reserves are not a permanent solution, of course, and crude oil will continue to trade as a ‘meme stock’ until peace is the solution.
The rise in retail participation comes at a time when geopolitical tensions dominate oil markets and especially as participation in oil markets has become easier, lowering barriers for individual investors.
Retail traders can gain exposure through ETFs like USO or the US Brent Oil Fund (BNO), while smaller futures contracts have also made direct trading more accessible.
Traders have been closely watching the possibility of further supply disruptions, particularly as shipping through the Strait of Hormuz, a key bottleneck for global energy flows, has been effectively shut down.
That uncertainty has made oil prices unusually volatile, attracting speculative interest from traders seeking to profit from rapid price swings, market observers said.
GameStop, silver and now oil?
Tom Sosnoff, CEO of fintech platform Lossdog, noted that commodities are becoming the latest speculative playground for retail investors.
“Physical commodities like crude oil have become speculative memes for 2026. First, it was silver and gold, and now it’s oil,” Sosnoff said.
“Markets love noise and volatility. The perception among retail traders is: where there is more activity, there is more opportunity.”
A meme trade is an asset that becomes popular among online retail investors, triggering rapid capital inflows and outsized price swings that may not always reflect underlying fundamentals.
Reddit users have been discussing buying oil ETFs to capitalize on the Iran conflict-fueled rally, with traders boasting of quick gains and debating whether the rally still has “meat on the bone,” reminiscent of the speculation seen during previous bouts of meme stocks.
Oil prices since the beginning of the year
Several experts highlighted that oil is different from the stocks that fueled previous meme stock frenzies.
Saul Kavonic, energy analyst at MST Marquee, said the comparison to meme stocks likely reflects greater volatility rather than retail investors dictating market direction.
“Given the scope for sudden escalations as well as de-escalation, and varying rhetoric from warring parties that could suddenly signal different war trajectories, oil will trade with more erratic and widened price swings during war,” he said. He Crude Oil Volatility Index has reached its highest level since 2020.
Other analysts said the influx of retailers reflects a direct bet on supply disruptions.
Andy Lipow, president of Lipow Oil Associates, said many investors are responding to images of geopolitical turmoil and the possibility of shortages.
Retail investors should remember that trading crude oil is like playing musical chairs. When the music stops, it won’t be pretty.
“Retail investors have been watching the news and see on television an oil supply disruption with no clear end in sight. That presents these investors with an opportunity to make some money by anticipating further increases in price,” Lipow said.
However, unlike a meme stock, the oil supply disruption is real and based on actual production shutdowns, Lipow noted, and the IEA estimates it at around 10 million barrels per day.
However, analysts warn that the same volatility that attracts retail traders could quickly turn against them.
“Retail investors should remember that trading crude oil is like playing musical chairs. When the music stops, it won’t be pretty,” Sosnoff said.
Some institutional analysts said crude oil’s performance is increasingly similar to that of speculative assets during periods of intense geopolitical tension.
Macquarie strategists said the current environment, marked by war risk, supply uncertainty and government intervention, could keep oil prices unusually volatile.
“Strategic reserves are not a permanent solution, of course, and crude oil will continue to trade as a ‘meme stock’ until peace is the solution,” said the bank’s financial markets economist, Thierry Wizman.
