Recent reports indicate that the US Treasury Department announced on Tuesday the revocation of a license that had exempted certain Iranian oil export activities from sanctions, raising concerns about the future of US-Iran negotiations. Following this news, Brent crude oil prices surged, gaining over 5% intraday. According to documents from the US Treasury's Office of Foreign Assets Control, the exemption issued on June 21 was revoked effective July 7, 2026. This previous exemption, based on a formal memorandum of understanding between the US and Iran, was initially valid for two months with potential for extension. The new directive states that previously authorized transactions can only continue until July 17, 2026, for the purpose of winding down, with no new Iranian crude oil transactions authorized after July 7.
The latest tensions revolve around control of the Strait of Hormuz. Under an agreement reached last month, Iran pledged to allow safe passage for commercial vessels through the strait but has repeatedly insisted that all such vessels must use the northern route along Iran's coast. Concurrently, the US Navy has developed a southern route along the Omani coast, and reports of "Iranian attacks on commercial ships" in recent months have largely targeted vessels using this southern path.
This shift in the US stance comes as oil exports and production from the Persian Gulf were just beginning to recover to pre-war levels, with international oil prices having retreated to levels seen before the conflict's outbreak. If the US revocation of the Iranian oil waiver ultimately leads to the collapse of the memorandum of understanding, global markets could face renewed turbulence.
Market Implications and Analyst Views
Previously, Natasha Kaneva, Head of Commodities Research at JPMorgan, noted in a report: "The market faces the risk of a temporary supply glut as crude oil stranded in the Strait of Hormuz finally re-enters the market, while the market has already spent months learning to operate without it." The International Energy Agency predicts that the pace of strategic petroleum reserve releases will slow to almost a halt over the next month. Some analysts expect governments to quickly seek to rebuild inventories, which would increase demand and help absorb any surplus oil.
However, whether this supply glut is temporary may depend on two key factors: the sustainability of the fragile peace agreement and whether the OPEC+ producer group is willing to restrain the rebound in production to protect oil prices. Jorge Leon, Head of Geopolitical Analysis at Rystad Energy and a former OPEC Secretariat staffer, stated that the normalization of oil and gas flows through the Strait of Hormuz will present OPEC with a difficult problem. He remarked, "The real challenge will come after oil supply normalizes and inventories are rebuilt, when OPEC+ must shift from increasing production to defending the market. At that point, the question is no longer how much OPEC+ can produce, but who is willing to cut."
Related Investment Opportunities
In light of the evolving situation with Iran, investors are advised to focus on opportunities in upstream oil and gas exploration and development, oilfield services, and refining and petrochemical companies. In the short term, it is believed that due to increased geopolitical risk premiums, the central price of oil could rise from around $67 per barrel in 2025 to above $70. Additionally, Iran's control over the Strait of Hormuz, the stability of Middle East crude trade flows, and the security of production facilities in Gulf countries are seen as short-term catalysts for higher oil prices.
CNOOC (HKEX: 00883): In early March, a CICC research report noted that, considering a projected 15% year-on-year decline in oil prices for 2025 and current upward expectations, it lowered its 2025 net profit forecast for CNOOC by 4.2% to RMB 128.4 billion, largely maintained its 2026 net profit forecast, and projected a 2027 net profit of RMB 142.47 billion. The firm raised its A-share target price for CNOOC (600938.SH) by 29% to RMB 38.8 and increased its Hong Kong-listed share target price by 22.8% to HK$28, maintaining an "Outperform" rating for both.
PETROCHINA (HKEX: 00857): As China's largest integrated oil and gas producer and marketer, it is a global energy giant with operations spanning the entire industry chain, including exploration and production, refining and chemicals, marketing, and natural gas and pipelines.
SINOPEC CORP (HKEX: 00386): The company released its 2025 production and operation data, reporting crude oil output of 39.70 million tonnes, a year-on-year increase of 0.2%; natural gas production of 41.253 billion cubic meters, up 4.02% year-on-year; and total domestic sales volume of refined oil products at approximately 178 million tonnes, a decrease of 2.88% compared to the previous year.
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