Oil Surges $3.45 as Trump Reinstates Iran Sanctions, Markets React
WTI crude jumped sharply after the US Treasury revoked an Iran oil sanctions waiver, while equities slipped and yields climbed.
Washington delivered a jolt to global energy markets Monday as the US Treasury revoked its June 21 sanctions waiver for Iranian oil, sending WTI crude up $3.45 to $72.00 per barrel and signaling a potential collapse in ongoing nuclear deal negotiations. The move came after an earlier Iranian attack on tankers sparked only a modest 80-cent pop in oil prices, but bids accelerated sharply through the New York afternoon once the Treasury announcement landed. Analysts view the waiver revocation as a sign that both sides are struggling to enforce a previously reached memorandum of understanding.
The sanctions news rippled across asset classes. US 10-year Treasury yields rose 7 basis points to 4.55%, the dollar edged higher, and the S&P 500 slipped 0.4% as investors digested the geopolitical uncertainty. Gold retreated $49 to $4,114. The Swiss franc led currency gains while the New Zealand dollar lagged. A large convoy of Japanese vessels reportedly cleared the Iranian corridor just before the escalation, representing some of the last stranded oil to exit the region.
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Equities showed choppy, two-way action — particularly in AI and chip names, which dropped as much as 10% at session lows before partially recovering. The volatile price action in the sector is drawing scrutiny, with some market watchers suggesting the current phase of the AI trade may be pausing or peaking after a strong June rally.
On the economic data front, the New York Fed's consumer survey raised fresh concerns, with one-year inflation expectations rising to their highest level since 2023 — even as oil price expectations fell. That divergence points to broadening price pressures beyond energy. Meanwhile, the US trade deficit came in slightly better than forecast at -$77.6 billion versus an estimated -$78.5 billion, and Canada posted a May trade surplus of $4.24 billion, well above the $2.85 billion consensus. New York Fed President John Williams offered little new guidance, reiterating a view of steady, trend-like US economic growth.
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