The 60-Day Truce is Cracking: US Revokes Iran Oil Waiver and Resumes Air Strikes
The 60-Day Truce is Cracking: US Revokes Iran Oil Waiver and Resumes Air Strikes
The fragile ceasefire between the US and Iran has collapsed just weeks after it began.
A US official summarized the sudden escalation on Tuesday: “The MOU in effect with Iran is entirely performance-based. Iran will only reap benefits if they exhibit good behavior.”
Washington’s justification is blunt: the truce with Tehran was never unconditional; it was “performance-based,” and Iran, according to the United States, failed that test.
The twin decisions—economic punishment through sanctions and military retaliation through fresh strikes—mark one of the sharpest reversals in the U.S.-Iran confrontation since the two sides had only recently stepped back from open hostilities. What had looked like a narrow diplomatic opening now appears to be collapsing under the weight of mutual mistrust, attacks in the Strait of Hormuz, and clashing interpretations of what the ceasefire actually required.
The Trigger: Chaos in the Strait of Hormuz
The breakdown trace back to Tuesday, when three commercial merchant ships—including the Qatari LNG tanker Al-Rekayyat and a Saudi-flagged crude carrier—were struck by projectiles while transiting the strategic shipping lane.
While Tehran has not explicitly claimed responsibility, US Central Command (CENTCOM) quickly pointed the finger at Iran, labeling the aggression a "clear violation" of the truce.
The Scope: CENTCOM targeted over 80 Iranian sites, including air defense systems, coastal radar positions, command-and-control hubs, and more than 60 Islamic Revolutionary Guard Corps (IRGC) small boats.
The Fallout: Explosions were reported near Kharg Island—the lifeblood of Iran's energy sector, handling roughly 90% of its oil exports—as well as Bandar Abbas and Qeshm Island.
The Economic Hit: "General License X" Revoked
Alongside the military response, the US Treasury Department immediately canceled General License X (GL X).
Introduced on June 22 as part of a 14-point memorandum of understanding (MOU) signed by Donald Trump and Iranian President Masoud Pezeshkian, this short-lived waiver had granted Iran its first legal window in years to export crude oil, petroleum, and petrochemicals.
The waiver was originally set to last until August 21, but it has now been replaced with a restrictive "wind-down" window.
[June 17: Trump & Pezeshkian sign MOU] ➔ [June 22: GL X waives oil sanctions] ➔
[July 7: Tanker attacks & US retaliates]
Global Impact: Oil Spikes and Diplomatic Fury
The immediate fallout of the escalation rippled through international markets and diplomatic channels:
Energy Shock: Brent crude futures surged over 3%, crossing back above $76 a barrel as fears of prolonged instability in the Strait of Hormuz returned.
Iranian Backlash: Iran’s Foreign Ministry slammed the move as a blatant breach of the framework agreement.
Deputy Foreign Minister Kazem Gharibabadi warned on X that Tehran will take "decisive measures" to protect its national security, while military leadership promised a "crushing response" to the strikes. Collateral Buyers: Major energy buyers like India—which briefly stood to benefit from the resumption of legal Iranian crude imports—are now heavily insulated, having already locked in alternative July and August supplies from Russia and OPEC+ partners.
With indirect peace talks in Qatar already stalled and the 60-day negotiation window effectively shattered, the region faces a volatile return to maximum economic pressure and active military conflict.
Global Oil Market Response
The abrupt end of the temporary US-Iran truce has shattered the brief period of relief global energy markets enjoyed in June.
1. Sharp Price Reversals
Prior to the July 7 attacks, the 60-day ceasefire agreement signed in mid-June had successfully taken the geopolitical risk premium out of the market, cooling prices off from the extreme highs seen earlier in the war.
The Knee-Jerk Reaction: Following the attacks on the three tankers and the subsequent US military response, Brent crude futures immediately surged over 3%, crossing back above $76 a barrel.
The Sentiment Shift: Analysts view this not just as a temporary spike, but as a structural shift back to a war-footing. The market has effectively re-priced the reality that a permanent diplomatic resolution is far out of reach and that "performance-based" truces offer zero long-term stability.
2. The Death of Legal Iranian Crude Flows
The revocation of the US Treasury waiver brings a swift end to Iran’s brief return to the legitimate global energy grid.
The Blocked Cash Blockade: Under the newly issued General License X1, international buyers have only a strict 10-day wind-down window ending July 17 to clear pending transactions.
Crucially, any revenues generated during this wind-down cannot be pocketed by Tehran; they must be funneled into blocked, interest-bearing accounts. The Return to the Shadow Market: This effectively forces Iranian oil—which had briefly peeked into legal channels—back into the illicit "ghost fleet" network, where it must be sold at steep discounts, primarily to independent refiners in China.
3. Maxing Out Alternative Pipelines
Because the threat of an outright blockade or highly dangerous transit conditions in the Strait of Hormuz has returned, regional producers are aggressively leaning on bypass infrastructure to insulate their exports:
| Infrastructure Route | Function & Impact | Current Status |
| Saudi East-West Pipeline | Moves crude from eastern fields across the peninsula to the Red Sea port of Yanbu. | Running at full capacity, handling roughly 7 million barrels per day (mbd) to bypass Hormuz entirely. |
| UAE Habshan–Fujairah Pipeline | Directs crude from Abu Dhabi fields straight to the Gulf of Oman. | Fully utilized, bypassing the chokepoint to deliver 1.8 mbd directly to open ocean waters. |
For nations without these land-based bypass options—such as Kuwait, Iraq, and Qatar (for its massive LNG volumes)—the risk of stranded assets has spiked overnight.
4. War Risk Insurance and Shipping Friction
The physics of oil movement are becoming rapidly more expensive, even for vessels that manage to pass through safely.
Prohibitive Insurance Premiums: Following the International Maritime Organization’s confirmation that July 7 saw the highest number of single-day tanker attacks since late April, maritime insurers are drastically hiking "War Risk" premiums for any hull entering the Persian Gulf.
Alternative Routing Costs: For shipping companies unwilling to take the risk, the alternative is utilizing routes that stick strictly closer to the coastlines of Oman or the UAE. However, because Iran has warned vessels against utilizing non-approved routes, navigating these alternative paths now requires specialized security escorts and faces prolonged delays.
The Macro Outlook: While major Asian importing hubs like India are heavily insulated for July and August due to pre-negotiated long-term contracts with Russia and OPEC+ partners, a prolonged closure or active hot war in the Strait will inevitably strain global spare capacity, threatening a return to the broader inflationary pressures that characterized the early months of the conflict.
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