Oil Prices Slide as Trump Launches ‘Project Freedom’ in Hormuz Standoff

CNBC reported Monday that oil prices dipped in volatile early trade as markets digested U.S. President Donald Trump’s announcement of a military-backed operation to free cargo ships trapped in the Strait of Hormuz.

International benchmark Brent crude slipped roughly 0.35% to around $107.77 per barrel. U.S. West Texas Intermediate futures fell a similar amount, trading near $101.31 per barrel.

Trump Announces ‘Project Freedom’ for Trapped Vessels

Trump unveiled the initiative via Truth Social on Sunday, describing an effort to escort civilian vessels out of the blockaded waterway. The plan targets ships flagged to countries uninvolved in the ongoing Iran conflict, with the goal of restoring normal commercial movement through the strait.

U.S. Central Command confirmed the scale of the deployment shortly after Trump’s post. The operation involves guided-missile destroyers, more than 100 aircraft operating from land and sea, unmanned platforms across multiple domains, and approximately 15,000 service members. The effort was set to begin Monday local time in the Middle East.

A Chokepoint Under Pressure

The Strait of Hormuz is among the world’s most consequential energy corridors. Before the conflict escalated, roughly one-fifth of global energy supplies transited the waterway each year. That flow has now slowed to a near standstill as the blockade holds.

Further evidence of the danger came Monday from the United Kingdom Maritime Trade Operations agency, which confirmed that a tanker had been struck by projectiles north of Fujairah in the United Arab Emirates. The incident reinforced the hazards crews face anywhere near the region.

OPEC+ Output Move Adds Another Variable

Traders were also processing a fresh production decision from OPEC+. The cartel agreed to raise output by 188,000 barrels per day at its first formal meeting since the United Arab Emirates departed the group. The modest increase reflects a market still pricing in substantial supply risk from the Hormuz closure.

Recession Warnings Grow Louder

Analysts are beginning to put numbers on the downside scenario. Gaurav Ganguly, head of international economics at Moody’s Analytics, told CNBC’s Squawk Box Asia that sustained elevated prices could tip the global economy into contraction. He indicated that Brent holding around $125 per barrel over an extended period would likely push global growth into recession territory.

For now, prices remain well below that threshold. But with military convoys entering one of the world’s busiest shipping lanes, the margin for miscalculation is narrow.

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