Oil prices surged on the first day of Trump’s ‘Project Freedom’ plan to unblock Hormuz
By John Liu, CNN
(CNN) — Oil hit its highest price of the year on the first day of President Donald Trump’s operation to guide stranded ships through the blocked Strait of Hormuz, underscoring the intense uncertainty that still dogs the global energy trade.
Brent crude futures, the global oil benchmark, slid 1.1% to $113.4 a barrel as of 1:58 am ET on Tuesday, after surging 5.8% to close at $114.4 on Monday –– the highest closing in 2026. West Texas Intermediate (WTI), the US benchmark, declined 2.1% to $104.3 a barrel.
Oil is traded as a futures contract, which means an agreement to buy or sell at a specified price on a future date. Tuesday’s WTI price reflects oil for delivery in June, whereas Brent reflects oil for delivery in July.
Being the world’s largest oil producer has not exempted the US from an energy shock, which has pushed the price of gasoline to $4.46 a gallon on Monday from an average of $2.98 a gallon before the war started, according to AAA.
US gas prices could hit $5 a gallon should the Strait of Hormuz remain closed next month, according to Andy Lipow, president of consulting firm Lipow Oil Associates. That spike would nearly match the record high of $5.02 a gallon in June 2022 after Russia invaded Ukraine.
The recent high prices came as Trump sought to free up the flow of oil tankers through the Strait of Hormuz, which has remained effectively shut by Iran since it was attacked by the US and Israel, choking off around 20% of the global oil supply before the war.
The president’s new initiative, dubbed “Project Freedom”, began on Monday to “guide” ships through the critical oil and gas shipping channel. But there were no major pickups in shipping traffic –– only four ships crossed the strait yesterday, according to S&P Global Market Intelligence.
Before the war, more than 120 ships a day on average passed through the vital waterway.
Several commercial vessels and a major oil port in the United Arab Emirates were also hit on Monday, as the US destroyed some Iranian boats –– the largest escalation since the temporary ceasefire began four weeks ago.
The fire traded between the US and Iran put the fragile ceasefire between the two countries under strain as Trump declined to say whether the truce is still in effect.
The US and Israel’s decision to go to war with Iran has sparked a historic oil crisis with countries around the world, including many key US allies in Europe and Asia, now facing soaring fuel prices and surging costs.
The-CNN-Wire
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CNN’s Matt Egan and Hanna Ziady contributed to this report.
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