The week since Issue #35 (Aug 3) has been the most volatile on the diplomatic front of the entire war, even as the physical picture at Hormuz barely moved. Friday Aug 1, Iran’s IRGC claimed hitting two tankers transiting Hormuz under US military escort — unconfirmed by Western maritime authorities. Over the following weekend, Trump said the US deferred planned new strikes on Iran, and by Wednesday Aug 5, Iran and Oman said they had reached an agreement on a proposed shipping route — a joint statement in final drafting, the inbound lane reportedly under Iran’s control, the outbound lane partly Oman’s. Two regional officials told AP the draft awaited sign-off from Iran’s Supreme Leader Khamenei, who the same officials said has faced unresolved questions about his health and public availability since taking office in July — an unconfirmed but consequential claim.
That optimism did not last. Thursday Aug 6, Iran’s parliament revealed terms for the route agreement far stricter than markets had priced in: a ban on US and Israeli vessels transiting Hormuz entirely, a requirement that “hostile” countries pay compensation before being granted passage, penalties equal to 20% of a vessel’s cargo value for violations, and language stating the strait would only fully reopen once the US lifts its maritime blockade of Iran. The same night, contested explosions were reported on Qeshm Island — Iranian state media said its forces had engaged “hostile targets” at the entrance to Hormuz, but Hormozgan’s deputy governor said no strike had actually occurred and Israel said it was “not aware” of one. Brent whipsawed accordingly, dipping toward $75 on the deal news before reversing to settle near $81 as the stricter terms landed.
The weekend hardened Iran’s position further. FM Araghchi said Sunday there are “no ongoing negotiations” with Washington, and Tehran vowed not to reopen the strait “until America corrects its behavior” — demanding an end to the US naval blockade, sanctions relief, and compensation for war damages. Araghchi separately said the previous shipping traffic-separation scheme is “no longer acceptable,” with Iran now discussing only a temporary route with Oman while a permanent framework remains unresolved. VP Vance said Friday the US wants to “maximize the amount of oil and gas coming out of the Strait of Hormuz,” expecting pre-war volumes restored, contingent on an Iranian commitment not to fire on commercial vessels. Oman’s foreign ministry called its talks with Iran “positive and constructive” while condemning, without assigning blame, “repeated attacks on vessels” transiting the strait.
The physical picture kept deteriorating in parallel to the diplomacy. ADNOC reported attacks on three vessels transiting Hormuz over the weekend. UKMTO logged a projectile strike on a ship near Khasab, Oman Saturday — fire extinguished, crew and vessel safe. Yemen’s Houthis claimed a strike on Saudi Arabia’s Jazan refinery, a separate “large-scale” attack on Saudi-aligned forces inside Yemen, and a strike on Mocha port. Iranian state media reported Sunday that President Pezeshkian met with Khamenei to discuss “the war and the future ahead” — NBC News noted no evidence was provided that the meeting actually took place, a claim GEF is not treating as confirmed; it follows Pezeshkian’s own earlier acknowledgment that reaching Khamenei has been “very difficult.”
On market plumbing: the official EIA release for the week ending Jul 31 showed US commercial crude unexpectedly built 2.479 million barrels to 407.0 million — against analyst expectations of a draw — while the SPR drew a further 2.841 million barrels to 304.8 million, a fresh multi-decade low. Separately, Australia’s long-tracked excise cliff finally resolved, in the harder direction: the remaining 16 c/L relief expired Aug 2 as scheduled, and the ACCC’s 21st weekly report showed capital-city petrol jumping to 193.6 c/L and diesel to 232.8 c/L even before the Aug 3 excise step-up fully compounds.
For the full risk matrix and this week’s Analyst Outlook — including GEF’s base-case, downside and upside scenarios for the coming week — see the Risk Analysis page; for the live chokepoint picture, see Marine Traffic; for the shortage map, see Shortages.