Oil Surges $3.45 as Trump Reimposing Iran Sanctions Rocks Markets
WTI crude jumped sharply after the US Treasury revoked an Iran oil sanctions waiver, while AI stocks slid and inflation expectations climbed.
Oil prices surged Monday after the US Treasury revoked its June 21 sanctions waiver on Iran, sending WTI crude up $3.45 to $72.00 a barrel — a clear signal that the fragile diplomatic framework between Washington and Tehran is fracturing. The move accelerated gains that had been building slowly throughout the New York session, capping a day dominated by geopolitical risk re-entering energy markets.
Earlier in the session, an Iranian attack on tankers drew a muted reaction from traders, sparking only an initial 80-cent pop before bids gradually strengthened into the afternoon. The collapse of the sanctions waiver came as both sides struggle to enforce a memorandum of understanding. Notably, a large convoy of Japanese ships had exited through the Iran corridor the prior day, representing some of the last stranded oil to move through the route — leaving the path forward deeply uncertain.
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Beyond crude, Treasury yields climbed 7 basis points to 4.55% and the US dollar edged higher, while the S&P 500 shed 0.4%. AI and chip stocks absorbed the sharpest pain, with several names falling more than 10% and largely erasing gains made in June. Analysts watching the volatile two-way price action in AI equities see it as evidence that the current phase of the AI trade may be plateauing or pausing for a reset.
On the economic data front, the New York Fed's latest consumer survey showed one-year inflation expectations rising to their highest level since 2023 — a worrying signal given that expected oil price inflation actually declined, suggesting price pressures are broadening across the economy. The US trade deficit for the period also came in slightly better than the $78.5 billion estimate at $77.6 billion, and Canada posted a stronger-than-expected May trade surplus of $4.24 billion versus the $2.85 billion forecast. Fed's New York President John Williams reiterated a view of steady, trend-like US economic growth without offering new guidance.
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