TLDR
- Brent crude steadied above $108 a barrel after an initial 2.4% drop at Monday’s open
- Trump announced the US will guide stranded commercial ships out of the Strait of Hormuz
- The plan does not currently include Navy warships physically escorting vessels
- A tanker was reportedly hit by projectiles 78 nautical miles north of Fujairah on Sunday
- Markets showed little confidence the plan would meaningfully reopen the strait
Oil prices steadied on Monday after an early sell-off, as traders weighed a new US plan to help stranded ships exit the Strait of Hormuz.
Brent crude was little changed above $108 a barrel after falling as much as 2.4% at the open. West Texas Intermediate held near $102 a barrel.
President Donald Trump announced on social media that the US would begin guiding neutral commercial vessels out of the strait starting Monday. “We will use best efforts to get their Ships and Crews safely out of the Strait,” he wrote.
⚡️JUST IN: U.S. TO ESCORT SHIPS OUT OF STRAIT OF HORMUZ
Trump says the U.S. will launch “Project Freedom” to guide neutral ships stranded in the Strait of Hormuz to safety starting Monday.
He called it a humanitarian effort, warning any interference would be met with force. pic.twitter.com/pdl89U126x
— Coin Bureau (@coinbureau) May 3, 2026
US Central Command confirmed it would provide military support, including guided-missile destroyers, aircraft, and drones. However, the Wall Street Journal reported the plan does not currently include Navy warships physically escorting ships.
The announcement failed to lift prices for long. Analysts and traders quickly questioned how effective the plan would be.
“The market does not seem convinced by the plan,” analysts at ING said. “Even if this allows vessels to leave the Persian Gulf, we’re likely to see little inbound traffic.”
Haris Khurshid, chief investment officer at Karobaar Capital, said markets have grown tired of Trump’s statements on the conflict. “Trump fatigue is setting in more and more — I don’t think the market’s really taking it seriously,” he said.
Tanker Hit as Tensions Stay High
A tanker reported being struck by projectiles on Sunday, 78 nautical miles north of Fujairah in the United Arab Emirates. The UK Maritime Trade Operations reported the incident. The vessel was not identified, but crew members were said to be safe.
Trump also raised the possibility of using force if Iran tried to block ships from leaving. He said US representatives were having “very positive” talks with Tehran but gave no further details.
Iran rejected the US plan. Any American interference in the strait would violate the ceasefire, Al Mayadeen reported, citing Ebrahim Azizi, head of Iran’s parliament’s National Security Commission.
The conflict began in late February after the US and Israel attacked Iran, citing concerns over Tehran’s nuclear program. Since then, a double blockade has formed, with Iran stopping ships from leaving the Persian Gulf and the US intercepting vessels headed to or from Iranian ports.
Supply Pressures Mount
Treasury Secretary Scott Bessent said over the weekend that Iranian oil well closures could begin “in the next week” as the country’s storage fills up.
ANZ Group analysts said supply losses are growing each day the strait stays closed. “With the demand response muted, a significant drawdown in inventories has ensued,” they wrote.
Crude oil has hit its highest level since 2022 in recent weeks due to the conflict.
OPEC+ agreed over the weekend to a small symbolic increase in June quota levels, as the group sought to project stability following the exit of the United Arab Emirates.
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