If you watched today’s video on my Power Pundit Youtube channel, you already know the basic shape of the disaster: Iranian missiles struck two UAE-owned supertankers; on that exact same day, Iran cleared out the political hardliners who wanted to tank the peace deal; and Donald Trump, reacting to his prized ceasefire collapsing like a cheap card table, tried to slap a 20 percent transit fee on the Gulf.
(You know, the exact kind of toll his own Secretary of State called completely illegal just a month ago.)
Naturally, that fee evaporated in less than twenty-four hours, replaced by vague, hand-waving promises of “trade and investment deals” from the very same Gulf states who were supposed to pay it in the first place.
But there is something incredibly important I left out of the video: back on June 21, just four days after the ink dried on the ceasefire, the US Treasury quietly slid a piece of paper across the table called General License X. For the first time in years, this license allowed Iran to sell its oil out in the open and in actual US dollars; the ceasefire was just the pretty wrapping paper on a giant box of cold, hard cash. When the tankers started burning, the Treasury panicked and revoked the license, leaving us with its decaying zombie sibling, General License X1. That license officially expires at 12:01 a.m. Eastern time on Thursday, July 17, and because no new oil loadings have been authorized since July 7, we are looking at a direct, slow-motion trainwreck between Washington and Tehran.
The White House desperately needs this license to die a loud, public death because a carrot is only useful if you can actually take it away; meanwhile, Iran’s oil minister, Mohsen Paknejad, has already scoffed and said the oil will keep flowing regardless. By Friday morning, we’re looking at a binary reality: either Iranian crude completely stops loading, or the entire trade slides into the dark, greasy underbelly of the black market. If it goes dark, the only buyers brave (or shameless!) enough to touch it will be Chinese refiners, forcing Trump into the exact nightmare scenario he’s spent his entire presidency dodging: he can either sanction Chinese refiners in the middle of a war, opening a second economic front against Beijing, or stand there and let the entire world watch his high-profile blockade leak like a dollar-store bucket. Whichever choice he makes will ripple outward, directly affecting the price of every barrel of oil, every shipment of liquefied natural gas, and every single megawatt of electricity feeding the world’s power-hungry data centers.
What Monday Actually Told Us
Let’s look at what the market actually did on Monday, because the screaming cable-news headlines are usually written by people who think oil comes from a magic tap under the earth:
