Oil Surges $3.45 as Trump Reimposed Iran Sanctions Rattle Markets
WTI crude jumped sharply after the US Treasury revoked an Iran oil sanctions waiver, while AI stocks slid and inflation expectations climbed.
Washington moved to tighten the screws on Iran Monday as the US Treasury revoked its June 21 sanctions waiver, sending WTI crude oil up $3.45 to $72.00 a barrel — the clearest signal yet that negotiations between the two countries are unraveling. The waiver's withdrawal follows an Iranian attack on tankers that initially drew little market reaction, but bids accelerated through the New York afternoon as traders absorbed the diplomatic fallout. A large convoy of Japanese vessels departed via the Iran corridor just days earlier, representing some of the last stranded oil to exit the route.
The broader market picture was mixed. US 10-year Treasury yields climbed 7 basis points to 4.55%, the dollar edged higher, and the S&P 500 shed 0.4% on the session. The biggest intraday drama played out in chip stocks, where major names fell as much as 10%, largely erasing the gains accumulated throughout June. Analysts noted the violent two-way swings in AI-related equities may signal that the current phase of the artificial intelligence trade is at minimum pausing, if not peaking.
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On the economic data front, the New York Fed's consumer survey raised fresh inflation concerns, with one-year expectations rising to their highest level since 2023 — even as anticipated oil price inflation actually fell. That combination implies price pressures are broadening beyond energy, a dynamic that could complicate the Federal Reserve's policy calculus. Fed President John Williams offered no new guidance, reiterating his view of steady, trend-like US economic growth.
Trade data provided a modest bright spot. The US international trade deficit came in at $77.6 billion versus the $78.5 billion estimate, a slight beat. Canada also surprised to the upside with a May trade surplus of $4.24 billion against expectations of $2.85 billion. Gold pulled back sharply, falling $49 to $4,114, as rising yields and a firmer dollar weighed on the metal. The Swiss franc led currency markets while the New Zealand dollar was the session's biggest laggard.
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