US Halts Hormuz Escorts After 1 Day to Pursue Iran Deal

The White House has paused its military operation to reopen the Strait of Hormuz, signaling a potential pivot toward a diplomatic resolution with Iran as economic and military pressures reach a boiling point.

The Trump administration suspended its "Project Freedom" escort mission in the Strait of Hormuz just one day after it began, after the operation failed to meaningfully restart traffic and provoked new Iranian attacks. The sudden reversal, announced by President Trump via social media, is a tacit admission that military force alone has been unable to break the two-month-old blockade of the world's most critical oil chokepoint. The pause is intended to assess the viability of a peace deal brokered by Pakistan.

"The US has already used its highest levels of escalation, including strikes on Iranian leadership and weapons facilities, without forcing them to back down," said Bryan Clark, a senior fellow at the Hudson Institute and a former senior US Navy official. "The administration is running out of tools to compel Iran and is now trying to restore the shipping flow."

The mission's suspension followed a day where only six commercial vessels transited the waterway, a stark drop from the pre-war daily average of 130, according to data from S&P Global Market Intelligence. The minimal traffic came as Iran launched fresh attacks with cruise missiles and drones, while crude oil prices held above $100 a barrel.

With 20% of the world's oil supply choked off and US gasoline prices above $4.45 a gallon ahead of November's midterm elections, the administration is weighing the risks of continued military confrontation against a potential diplomatic off-ramp that could de-escalate the conflict.

Military Force Fails to Sway Shippers

Despite the presence of US warships, shipping and insurance companies have balked at resuming normal operations. The risk of physical damage from Iran's drone and "mosquito fleet" of fast attack boats, combined with the reputational risk of being the first to be targeted, has kept the market frozen. Data showed that by Tuesday afternoon, only a single vessel had passed through the strait.

"Controlling the strait is not simply a question of military force; it is a question of market confidence, insurer confidence, and the confidence of the civilian shipping industry," said Matthew Savill, Director of Military Sciences at the Royal United Services Institute. This highlights a significant change from the "Tanker War" of the 1980s, given Iran's investment in cheap, effective asymmetric naval weapons.

While Trump announced the suspension of the escorts, he stressed that the US naval blockade of ships entering or leaving Iranian ports remains "in full force." The move comes as Tehran reviews a US response, delivered via Pakistan, to its 14-point peace proposal. Iran's plan reportedly involves lifting the blockade and sanctions first, while delaying talks on its nuclear program—a point of contention for Washington.

This article is for informational purposes only and does not constitute investment advice.