Trump Pauses Project Freedom After Two Ships Transit Strait of Hormuz

President Trump on Sunday announced Project Freedom, an operation for the U.S. to guide ships exiting the Strait of Hormuz amid the ongoing Iran conflict. Two vessels successfully transited under the program. By Tuesday the effort was paused to allow time for negotiations toward a deal to end the war.

A cargo container ship operated by the CMA CGM Group came under attack and was damaged while attempting to transit the strait, the French shipping company said Wednesday. Major ship owners and operators continue to view the waterway as too dangerous because of risks from Iranian speedboats and drones.

Hundreds of vessels remain stuck in the Persian Gulf more than two months into the conflict, with costs mounting for shipping companies. Before the war, 100 to 135 vessels passed through the strait daily according to Lloyd’s List Intelligence. Traffic has since slowed sharply as Iran requires vetting by the Islamic Revolutionary Guard Corps for safe passage.

That vetting process forces ships to sail near Iran’s coast, disclose crew and cargo details, and in some cases pay a fee. Complying risks violating U.S. and EU sanctions that designate the IRGC a terrorist organization. Air Force Gen. Dan Caine, chairman of the Joint Chiefs of Staff, said Tuesday that more than 1,550 vessels carrying about 22,500 mariners are inside the Persian Gulf.

The U.S. Navy is blockading Iran’s ports from positions in the Gulf of Oman and Arabian Sea to increase pressure on Tehran.

and Operational Disruptions

Insurance premiums for vessels in the region have risen sharply. War risk coverage that once cost less than 1 percent of cargo value now ranges from 3 percent to 10 percent, according to Ed Anderson, a professor at the University of Texas McCombs School of Business.

Even with coverage, most shippers have avoided the crossing. Hapag-Lloyd, one of the world’s largest container lines, reported the situation is costing the company $60 million a week in higher fuel and insurance expenses. The Maersk shipping company said its U.S.-flagged Alliance Fairfax vehicle carrier exited the Persian Gulf through the strait on Monday accompanied by U.S. military assets.

The transit occurred without incident and the crew remained safe.

“Ultimately, it’s still going to come back to the primary issues of risk and safety. Axios reported the strait would reopen only gradually over a 30-day negotiation period if an initial one-page memorandum of understanding is reached in the coming days. Kaho Yu, head of energy and resources at Verisk Maplecroft, said oil prices and shipping flows are unlikely to normalize until attacks in the strait clearly recede. Even with diplomatic talks continuing, refiners, shippers and traders will stay cautious pending evidence that disruptions will not resume. A Wednesday meeting between Iranian and Chinese diplomats focused on de-escalation, yet tanker traffic and energy flows over coming weeks will serve as the primary test of stability. If a ceasefire holds and vessels gradually resume transit, shipping executives warn the return to normal will not occur overnight. Razat Gaurav, CEO of supply chain software firm Kinaxis, said carriers, insurers and shippers will require sustained confidence in stability before full capacity returns. Ocean shipping typically needs weeks or months to normalize because of long lead times and contracts, though certain cargoes such as liquefied natural gas and sulfur may clear faster.”

“Ferrying out a couple of ships has not really affected the shipping industry in any way whatsoever.”

Project Freedom lasted 48 hours and guided only two of more than 1,600 vessels that had been stuck, according to one assessment that described the initiative as unsuccessful. Shipping companies continue to weigh the balance between mounting daily costs and persistent safety threats in the region.