Brent crude fell to $86.83 on August 1, dropping more than 5 percent for the week as traders priced in de-escalation after President Trump cancelled a planned strike on Iran. The sell-off came before OPEC+ meets August 2 to decide September output, and before any signed deal or Hormuz reopening has been confirmed. [1]

The market is treating Trump's cancellation as resolution. It is not. The physical energy chain — tanker routes, insurance coverage, cargo scheduling, refinery throughput — remains disrupted through the Strait of Hormuz. Iran continues to attack civilian vessels attempting to transit the waterway using non-Iranian-approved routes, according to the Institute for the Study of War and the Critical Threats Project. On July 31, a projectile struck the Bermuda-flagged GASLOG SHANGHAI oil tanker northeast of Limah, Oman, damaging its engine room. [3]

OPEC+ previously confirmed a 188,000 barrel-per-day increase for August, the fifth consecutive monthly output boost. But the increase is a paper commitment while the strait remains effectively closed to most commercial traffic. Natural gas exports through Hormuz have dropped 95 percent, according to UN trade data, and fertilizer trade has been severely disrupted. Japan, which imports 93 percent of its crude from the Gulf, and South Korea, at 72 percent, face structural supply-chain restructuring that no OPEC+ output decision can resolve. [2]

The gap between what the paper's Hormuz thread has documented — persistent physical disruption — and what the market is pricing — imminent resolution — is the story. Brent's decline reflects optimism, not supply. The OPEC+ meeting on August 2 will reveal whether the Saudi-led group maintains its output increase or pauses in response to the unresolved blockade. If Iran's enforcement of the strait continues, the price correction may reverse as quickly as it arrived.