Trump Pauses Hormuz Rescue Mission as Oil Markets Navigate Historic Supply Crisis

President Donald Trump said the United States will temporarily pause its operation to guide ships through the Strait of Hormuz while maintaining the blockade , according to CNN. The Trump administration announced it had successfully guided two US vessels out of the strait Monday, but its "Project Freedom" does not appear to be the gamechanger that's needed to end the historic energy crisis , CNN reported.

The US and Iranian militaries traded shots on Monday, with the US blowing up small Iranian boats in response to attacks on US assets , according to CNN. MarketWatch reported that crude-oil futures fell late Tuesday after Trump's announcement to pause the effort. According to market data, WTI Crude traded at $71.50 per barrel on Tuesday, up 0.6%, while Brent Crude stood at $75.20 per barrel, up 0.5%.

The origins of "Project Freedom" lie in meetings the president has held over the last several days exploring options for reopening the strait, through which 20% of the world's oil passes , CNN reported. But the pause suggests diplomatic negotiations may be gaining traction, even as the supply crisis enters its third month.

Oil Reserves Plunging at Record Pace

The extended closure is taking a severe toll on global stockpiles. Crude and oil product flows through the Strait of Hormuz plunged from around 20 million barrels per day (mb/d) before the war to just over 2 mb/d in March, while exports via alternative routes increased from 3.9 mb/d in February to 6.4 mb/d on average , according to the International Energy Agency.

Export volumes of crude and refined products are currently at less than 10% of pre-conflict levels , the IEA reported. In response, the U.S., along with other International Energy Agency (IEA) member countries, has initiated the largest coordinated release of emergency stocks in history, with a total of around 400 million barrels agreed across member countries , according to GIS Reports.

The Financial Times reported that global oil reserves are plunging at record pace as the Middle East war strains supplies, with stocks near an 8-year low ahead of summer travel season.

UAE Shakes Up OPEC With Historic Exit

In a move that could reshape global oil politics for years, the United Arab Emirates announced its decision to withdraw from the Organisation of the Petroleum Exporting Countries (OPEC and OPEC+), effective 1 May 2026 , according to Enerdata.

The move deals a heavy blow to the oil-exporting groups at a time when the US-Israel war on Iran has caused a historic energy shock and rattled the global economy , Al Jazeera reported. The UAE will be the largest oil producer to leave OPEC, producing about 3.4 mb/d, representing roughly 3% of global crude supply, prior to the US-Israeli war on Iran , according to Enerdata.

The UAE could potentially flood the market with its 1.6 million bpd of extra production – equivalent to about 1.5 percent of global oil supply – enough to give it a serious edge in the global energy market , Al Jazeera reported, citing experts. "They are clearly preparing for the period after the war, because now that we have reached peak oil demand and we are entering a new environment – they want to be free from the constraints of OPEC," said Kingsmill Bond, an energy strategist at think tank Ember Future .

U.S. Crude Exports Hit All-Time Highs

American oil producers are stepping into the breach. U.S. oil exports have jumped to 5.2 million barrels per day (bpd) in April, a more than 30% increase over the 3.9 million bpd exported in February before the war , CNBC reported, citing data from Kpler.

March was the busiest month in the history of the Port of Corpus Christi, and the first quarter was its busiest quarter ever, with oil exports increasing to about 2.5 million barrels per day since the war started compared to 2.2 million bpd last year , CNBC reported, citing CEO Kent Britton. "It's a constant parade of tankers coming in and out," he said .

The U.S. Energy Information Administration (EIA) reported a staggering 6.4 million barrels of crude oil exports for the week ending April 24, marking the highest weekly figure ever recorded , according to Plainview Energy. But experts warn the surge is unsustainable. The rapid climb in exports has been almost entirely enabled by large-scale storage drawdowns, both from the Strategic Petroleum Reserve and commercial inventories across the country , Plainview Energy reported.

Saudi Arabia Cuts Prices From Record Highs

After charging unprecedented premiums during the crisis, Saudi Arabia is now adjusting. Bloomberg reported that state oil producer Saudi Aramco lowered its flagship Arab Light crude by $4 a barrel to a premium of $15.50 over regional benchmarks in June .

The cut comes after Saudi Arabia set record pricing in May. Aramco raised the price of Arab Light going to Asia next month to a premium of $19.50 above the average Oman/Dubai benchmark, the premium is the highest ever in Saudi pricing , OilPrice.com reported in early April.

Saudi Arabia is gaining a revenue edge over most of its Gulf Arab neighbors as it is able to divert the bulk of crude exports to the Red Sea, with higher prices more than compensating for lost shipments through the strait , Bloomberg reported, citing Goldman Sachs Group Inc.

Natural Gas Markets Feel the Squeeze

The crisis extends beyond crude oil. Natural Gas Intel reported that spot natural gas prices surged on Tuesday for Wednesday delivery as market participants focused on near-term demand strength, even as the prompt month futures contract stumbled. According to market data, Henry Hub Natural Gas traded at $3.25 per MMBtu, down 2.4%.

The Ras Laffan facility in Qatar, which is the largest liquefaction facility in the world, has been offline since it was first attacked on 2 March, with regional gas production also affected by the shut-in of oil fields , the IEA reported.

The energy crisis shows no signs of quick resolution. There are about 170 million barrels of crude oil, jet fuel, diesel and other refined products stuck in the Middle East aboard 166 tankers, and "it could be a very laborious process to get laden tankers out of the Mideast Gulf," said Matt Smith, Kpler's lead oil analyst , according to CNN.

With Trump's pause on Project Freedom buying time for negotiations, markets are watching closely whether diplomacy can succeed where military escorts have struggled—and how long the world's emergency oil reserves can sustain this unprecedented disruption.