A rapidly shifting 50-hour military operation to escort commercial vessels through the Strait of Hormuz has been paused by US President Donald Trump, even as global markets rallied on hopes of a breakthrough agreement between Washington and Tehran. The crisis has deepened fears about global energy supplies, with roughly 20% of the world's oil and gas normally flowing through the narrow waterway between the Persian Gulf and the Gulf of Oman.
Trump announced "Project Freedom" on Sunday, declaring that US military forces — including guided-missile destroyers, more than 100 aircraft, and 15,000 personnel — would escort stranded commercial ships through the strait. According to the Baltic and International Maritime Council, around 1,000 vessels carrying approximately 20,000 seafarers had become stranded in the region after Iran effectively closed the waterway following the start of the US-Israel war with Iran in late February. Two US-flagged merchant vessels successfully transited the strait on Monday, and Defence Secretary Pete Hegseth declared that "hundreds more ships" were preparing to follow. However, just hours after Hegseth and Secretary of State Marco Rubio publicly hailed the operation's progress on Tuesday, Trump posted on his Truth Social platform that the mission was being paused "for a short period of time" following "great progress" in negotiations, citing requests from Pakistan and other mediating countries. A French CMA CGM vessel, the Maltese-flagged San Antonio, was struck in the strait shortly before Trump's announcement, injuring crew members and damaging the ship.
The pause has not halted the wider conflict. On Monday, Iran fired missiles and drones at US forces, while Washington said it struck six Iranian fast boats it accused of threatening commercial shipping — a claim Iranian media disputed, with state-linked Tasnim news agency reporting that two small cargo vessels were hit, killing five civilians. The UAE said an oil tanker linked to its state company ADNOC was struck, and an explosion was reported on a South Korean vessel nearby. Iran denied responsibility for those incidents. Iran's Islamic Revolutionary Guard Corps (IRGC) said on Wednesday that safe passage through the strait would be "ensured" under new protocols, while Trump simultaneously threatened to resume bombing at a "much higher level" if a deal is not reached.
Diplomacy is accelerating on multiple fronts. Iran confirmed on Wednesday it was reviewing a new US proposal and would communicate its response through Pakistan. Iran's Foreign Minister Abbas Araghchi travelled to Beijing, where Chinese Foreign Minister Wang Yi called for an immediate ceasefire and urged both sides to reopen the strait "as soon as possible." A Pakistani source described the two countries as close to agreeing on a single-page memorandum of understanding. Trump is also scheduled to visit China on 14–15 May to meet President Xi Jinping, a trip already delayed because of the war.
Markets responded sharply to the diplomatic signals. Oil prices fell to two-week lows, with Brent crude dropping more than 7% toward $101 a barrel and US West Texas Intermediate sliding similarly. Global equities climbed, with Wall Street's S&P 500 rising 1.45% and European indices posting broad gains. Gold rose 3%, while the Iranian rial strengthened against the dollar on the free market. Shipping companies, meanwhile, are moving to hedge against prolonged disruption: Mediterranean Shipping Company (MSC) announced a new Europe–Red Sea–Middle East route bypassing the Strait of Hormuz entirely, sailing via the Suez Canal to Saudi Arabia and Jordan, with the first vessel departing Antwerp on 10 May. Lloyd's List reported that ship owners and insurers said "Project Freedom" had not provided "sufficient clarity or credible protection" to justify resuming transits, underscoring how far confidence in the waterway has eroded even as talks continue.