Project Freedom's first day answered the question subscribers have been asking: can the US force the Strait open?
Two ships got through. Out of the 120+ per day that used to transit before the war.
Iran fired cruise missiles at US Navy destroyers escorting the ships. US helicopters sank six Iranian boats. Iran launched 12 ballistic missiles, 3 cruise missiles, and 4 drones at the UAE. A drone set fire to the Fujairah Oil Industry Zone, the terminus of the pipeline that the UAE built specifically to bypass Hormuz. Commercial flights to Dubai and Abu Dhabi turned around midair. A South Korean cargo ship caught fire in the Strait.
Senior US officials told Fox News: "We are closer to the resumption of major combat operations than we were 24 hours ago."
Brent surged 5.8% to $114.44, the highest close of 2026. Gold declined sharply.
The Market's Verdict
CNN Business ran a headline that captures it: "Trump has a new Strait of Hormuz plan. The market isn't buying it."
Oil didn't drop on Project Freedom. It surged. The market looked at Day 1 (two ships, cruise missiles, six boats sunk, UAE attacked) and concluded this operation makes the Strait more dangerous, not less.
Retired Lt. Gen. Karen Gibson on CNN: "Iran just needs to continue to present a perception of risk to keep merchant traffic to small numbers, essentially keeping Hormuz all but closed. Commercial confidence is really the center of gravity."
That's the point. It doesn't matter if the US Navy can muscle two ships through. What matters is whether shipping companies and insurers will send hundreds of commercial vessels into a waterway where cruise missiles are being fired. They won't. Not at current risk premiums. Not with mines still in the water. Not when Iran has demonstrated it will attack even the UAE's own oil infrastructure in response.
Kpler estimates 170 million barrels of crude and refined products remain trapped in the Gulf aboard 166 tankers. Even once the Strait fully reopens, clearing the backlog could take three months.
Iran Attacked the UAE
This is the most significant escalation since the ceasefire began. The UAE was hit with 19 projectiles. Fujairah, the emirate on the Gulf of Oman that serves as the UAE's main sea access outside the Strait, saw its oil industrial zone set on fire. Saudi Crown Prince MBS condemned the attacks. The UAE Foreign Ministry called them "renewed treacherous Iranian aggression."
Iran's message is clear: if Project Freedom tries to force the Strait open, Iran will strike the countries cooperating with the US. The UAE just learned that its Hormuz bypass infrastructure (the Habshan-Fujairah pipeline) is not safe from retaliation. That pipeline handles roughly 1.5 million bpd, but ADNOC's total export volumes exceed its capacity. The UAE remains partially Hormuz-dependent, and now its bypass terminal has been hit.
This is exactly why no country has accepted Trump's invitation to send warships. He asked Japan, China, South Korea, and European countries. None committed.
The Beijing Window
Trump's planned visit to Beijing on May 14-15 creates a natural 10-day pause window. Attacking Iran while visiting its largest oil customer is diplomatically impossible. China buys roughly 80% of Iran's oil (or did, before the blockade). Trump has floated using the trip to pressure Xi into helping reopen the Strait. Bessent said any delay would be "logistics, not policy."
This means the "closer to resuming major combat operations" statement from yesterday is likely a pressure tool, not an imminent action. The TACO pattern suggests Trump uses the threat of escalation to extract concessions from Iran (or China, or both) before or during the Beijing visit. The war doesn't restart before May 15 unless Iran does something dramatic enough to force Trump's hand.
After May 15, the calculus changes. Gas at $4.46/gallon and climbing (some LA stations at $8), with Lipow Oil warning it hits $5 if the Strait stays closed another month. Trump's 34% approval rating. Midterms approaching. The political pressure to either end this or escalate dramatically builds every week.
Today's Bounce
Gold is modestly higher today after yesterday's sharp decline. Oil is pulling back. This is the corrective pattern we've seen after every major escalation day: the initial shock move (oil up, gold down) partially reverses the next day as the market digests. It doesn't change the direction.
Four ships crossed the Strait yesterday versus 120+ pre-war. Project Freedom didn't reopen the Strait. It proved the Strait can't be reopened by military escort alone. That's bearish for any scenario where oil normalizes quickly, which means it's bearish for gold through the mechanism I've been describing.
And yet, despite all that… stocks and bitcoin can move higher in the near term. Today’s and yesterday’s Gold Trading Alerts provide upside targets.
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Thank you.
Sincerely,
Przemyslaw K. Radomski, CFA