US Pulls Iran's Oil Waiver — Risk Premium Returns

Treasury's OFAC revoked General License X — the waiver issued under the June memorandum of understanding that authorized Iranian oil sales — effective July 7, with a wind-down period to July 17. A US official told CBS the MOU is "entirely performance-based" and Iran's Strait actions were "wholly unacceptable... will be met with consequences," while saying negotiators still work toward a final deal. The move followed Iran striking three tankers in and near the Strait, including Saudi Arabia's Wedyan and a Qatari LNG carrier. Brent rose ~2.5-5% to ~$73.83, WTI to ~$70; the 10-year Treasury yield rose to 4.51%. Sources: Reuters, CBS News, Globe and Mail

This is the first genuine pressure on the framework's "oil leg is dead" call, so it moves to contested rather than staying falsified. The falsification rested on supply reintegration capping price — the OFAC waiver, Saudi's $11 OSP cut, OPEC+ increases, UAE and Kuwait output. Revoking the waiver pulls one leg out: Iran's legal export channel. But the barrels that actually loosened the market this summer were mostly Saudi and OPEC+, which don't reverse here, and Iran's grey-market flows to China ran regardless of any license. So the physical glut is largely intact; what returns is a risk premium and an escalation path stacked on top — which is why oil rose 2.5-5% (a premium repricing) rather than relevelling structurally. The reason it matters: an oil pop plus rising long-end yields, four days before CPI, is exactly the transmission the rates/hawkish leg needs. If strikes continue and the wind-down curtails real flows, "falsified" could flip.