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Trump Pauses Project Freedom
There is a knee-jerk wave of optimism across assets with WTI crude futures lower, US equity contracts and Treasury futures higher after President Trump said Project Freedom will be paused.
Trump also said there is progress toward a final agreement with Iran which is what investors really want to see as it could potentially mean a reopening of Hormuz.
Trump statement on his TruthSocial feed (emphasis and spacing ours):
Based on the request of Pakistan and other Countries, the tremendous Military Success that we have had during the Campaign against the Country of Iran and, additionally...
...the fact that Great Progress has been made toward a Complete and Final Agreement with Representatives of Iran...
...we have mutually agreed that, while the Blockade will remain in full force and effect, Project Freedom (The Movement of Ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed.
WTI crude futures are testing back below $100...
Polymarket odds of Hormuz traffic returning to normal has jumped to better than a coin-flip...
Don't hold your breath though as there have been several false starts of this kind before, and traders will soon lose faith unless there are more details from the Iranian side.
Additionally late Tuesday, a French cargo ship was confirmed hit in a missile attack, injuring crew members:
A cargo ship in the Gulf region was hit by a possible land-attack cruise missile, causing several injuries among the ship's Filipino crew, two U.S. officials told CBS News.
The hit on the CGM San Antonio — which is owned by a French firm — took place late Tuesday evening local time, the officials said. The ship was near Dubai as of midday on Tuesday, but it is not clear whether the vessel has moved since then, according to public ship tracking data.
Rubio Declares Conflict in New Stage
Secretary of State Marco Rubio has announced Tuesday afternoon that offensive stage of Iran war is 'over'. He further said that ships stranded in the Strait of Hormuz are facing a humanitarian crisis and accused Iran of holding the world hostage by closing the Strait of Hormuz. Iran is denying that it attacked the United Arab Emirates, with the foreign ministry saying its 'defensive actions' were 'exclusively directed at the U.S.'
Operation Epic Fury is over, now Project Freedom.
The remarks were issued just as a new attack is unfolding on a foreign cargo ship in the strategic waterway:
UKMTO WARNING 055-26
Click here to read the full warning⤵️https://t.co/J5B2EilFQE#MaritimeSecurity #MarSecpic.twitter.com/EGcKTpsHtN— UKMTO Operations Centre (@UK_MTO) May 5, 2026
Reaction in oil...
...as the goalposts keep shifting:
BREAKING: REPORTER: But 10 weeks in, are we any closer to get rid of Iran's nuclear materials?
RUBIO: They no longer have a conventional shield. They have no Navy left. They don't have an Air Force. That's a very substantial achievement. That was the purpose of this. pic.twitter.com/bD33XPARVH— Sulaiman Ahmed (@ShaykhSulaiman) May 5, 2026
Is Ceasefire Over? Pentagon Answers Definitively
In the Tuesday morning Pentagon presser led by War Secretary Pete Hegseth, Joint Chiefs Chair Gen. Dan Caine stated very clearly that the US views Monday's escalation (the attack on UAE and some vessels in the Strait of Hormuz) as actions which are "all below the threshold of restarting major combat operations at this point."
The Trump administration has argued that it doesn't have to seek congressional approval to continue military operations beyond a 60-day limit because there is a ceasefire in effect. But the question raised Monday is: does the fresh Iranian cross-Gulf mark the end of ceasefire? Clearly the Pentagon and Trump administration are saying no. "No adversary should mistake our current restraint for a lack of resolve," Caine then emphasized.
Below are some of the latest top developments from various MSM sources:
—Trump’s desire to end the Iran war is being put to the test after Tehran fired at American warships on Monday and violently disrupted a U.S. effort to revive shipping in the Strait of Hormuz. Still, Trump wants to avoid a fresh bombing campaign, officials say, preferring a negotiated end to Tehran’s nuclear advancements and the weekslong war that has raised gas prices and hurt the global economy. (WSJ)
—U.S. intelligence assessments indicate that the time Iran would need to build a nuclear weapon has not changed since last summer, when analysts estimated that a U.S.-Israeli attack had pushed back the timeline to up to a year. The unchanged timeline suggests that significantly impeding Tehran's nuclear program may require destroying or removing Iran's remaining stockpile of highly enriched uranium. (RTRS)
—Trump says war could stretch 3 more weeks, claims US 'already won.’ (ABC)
Below: Pentagon slide in Tuesday's briefing showing Iranian attacks on Hormuz shipping: "Iran has fired at commercial vessels nine times and seized two container ships since the ceasefire was announced" (Gen. Caine).
And this puts things in perspective...
In a Pentagon briefing, top U.S. General
Dan Caine says Iranian attacks on shipping and U.S. vessels is currently below the threshold of restarting major combat operations. (This included 9 attacks on commercial vessels and 10 against U.S. forces) pic.twitter.com/CU0gQVSvzJ— Idrees Ali (@idreesali114) May 5, 2026
Internal Iranian Schism Over Monday UAE Attacks(?)
There's a lot of chatter that Iran's civilian government and the IRGC are at direct odds over Monday's attack on UAE, which resulted in a large blaze at the Fujairah oil facility and the three injured Indian nationals. Al Jazeera for example observes:
By targeting the facility, Iran is sending a direct message to UAE saying: “We can target your most important economic points even if you think you can get around the Strait of Hormuz,” said Turak.
Iran’s government has not confirmed or denied responsibility for the attack. Turak noted there are "quite contradictory" statements coming out of Iran, however.
And Saudi-funded Iran International claims the following dramatic schism and internal rupture over the risky cross-Gulf operation, which could signal the end of the ceasefire (though curiously President Trump himself has not said it is broken):
Exclusive information obtained by Iran International points to a growing clash between Iran’s President Masoud Pezeshkian and its military leadership over Monday’s escalation in the Persian Gulf and attacks on the United Arab Emirates.
According to sources familiar with Tehran’s deliberations, Pezeshkian has expressed strong anger at actions by the Islamic Revolutionary Guard Corps, led by Ahmad Vahidi, describing missile and drone strikes on the UAE as “completely irresponsible” and carried out without the government’s knowledge or coordination.
Pezeshkian is said to have described the IRGC’s approach to escalating tensions with regional countries as “madness,” warning of potentially irreversible consequences.
This certainly isn't the first time that Iran International, a London-based publication seen as also 'close' to Israeli intelligence, has alleged severe internal division in Iran's wartime decision-making, but the viewpoint is beginning to be echoed and reported on more broadly.
Two US Navy Destroyers Successfully Transit Strait
To review of Monday's major escalation, US Central Command said its forces had intercepted missiles targeting US Navy and commercial vessels, and also said American helicopters sank six small Iranian boats that officials said were targeting civilian vessels under American protection.
And also came a big milestone in terms of Washington aims to enforce Trump's newly announced Project Freedom plan to provide military escort for ships through Hormuz. Two US Navy destroyers transited the Strait of Hormuz and entered the Persian Gulf on Monday and overnight after navigating an Iranian barrage, according to defense officials.
CBS reports, "The USS Truxtun and USS Mason, supported by Apache helicopters and other aircraft, faced a series of coordinated threats during the passage, the defense officials said. Iran launched small boats, missiles and drones against them in what officials described as a sustained barrage." The report underscores further that "Despite the intensity of the attacks, neither U.S. vessel was struck."
'No Military Solution'
Iranian Foreign Minister Abbas Araghchi has issued an interesting statement decrying Trump's attempt at escalation in Hormuz, warning that there's no “military solution” to the crisis, while warning the US, UAE, and other regional countries against being drawn into a “quagmire” in the region.
"Events in Hormuz make clear that there’s no military solution to a political crisis," Araghchi wrote on X. "As talks are making progress with Pakistan’s gracious effort, the US should be wary of being dragged back into quagmire by ill-wishers. So should the UAE. Project Freedom is Project Deadlock," to top Iranian diplomat asserted.
Also of note is that Araghchi will travel to Beijing on Tuesday for discussions with his Chinese counterpart. "During the visit he will meet his Chinese counterpart [Wang Yi] to discuss bilateral ties and regional and international developments," Iran’s Foreign Ministry said in a statement.
Below: Graham says you either pay now or you pay later. “They tried to get a nuclear weapon. If you don’t believe that, you shouldn’t be allowed to drive.”
Lindsey Graham says Americans deserve higher gas prices because many doubted Iran was going to get a nuclear weapon.
Graham says you either pay now or you pay later.
“They tried to get a nuclear weapon. If you don’t believe that, you shouldn’t be allowed to drive.” https://t.co/1dDx1PVACvpic.twitter.com/Uma2pETYt7— Shadow of Ezra (@ShadowofEzra) May 5, 2026
Officially at least, Beijing has a policy of "noninterference" in other countries’ internal affairs, and has claimed to not be involved in the Iran conflict - while Washington has consistently accused China of providing intelligence to Tehran, and even possibly military hardware or weapons.
Elsewhere in the region, South Korea’s presidential secretary Choi Soung-ah says "the safety of international maritime routes and freedom of navigation should be protected under international law" and that Seoul is "watching President Trump’s remark related to this," according Reuters. This after ann explosion and fire on a South Korean-operated ship in the Strait of Hormuz on Monday, which Trump blamed on an Iranian attack.
Summary
- Fujairah says 3 injured in Iranian attack on Oil Industry Zone, UAE confirms "air defenses are now dealing with a missile threat", we have gotten reports of explosions in Dubai, which has sent oil higher and Emini futures into the red. UAE threatens retaliation.
- CENTCOM hails two US merchant ships exiting Hormuz Strait safely in "first step". Bessent issues remarks warning the US "will fire if fired upon."
- Iran insists Hormuz is under its control & says it targeted & struck a US Navy vessel, which the Pentagon/Central Command has denied.
- Trump announced Sunday US will 'help free up' ships stuck in Hormuz Strait through Project Freedom. Iran has in response issued a "redefined the control zone" in Strait of Hormuz.
- Pakistan facilities good faith return of Iranian crew members of US-seized merchant ship from two weeks ago.
The 'Mini War'
It's looking like the White House does not wish to given up just yet on the ceasefire, given this afternoon President Trump referenced the conflict as a "mini-war" - as opposed to a full blown war - in what seemed like an effort to downplay today's dramatic events. Not only did missiles rain down on the UAE, sparking a fire at a key oil facility, but the US Navy said it destroyed seven Iranian military boats. Here's what Trump said.
“They did a poll on the war with Iran, and they said only 32% of the people like it,” Trump said, without specifying who conducted the poll. “Well, I don’t like it, I don’t like war at all.”
“We’re in, I call it a mini-war,” Trump added a few moments later.
Trump has previously said he’s been advised to not call it a war. House Speaker Mike Johnson, R-La., said last week that the U.S. is currently “not at war.”
Meanwhile, more details via CENTCOM on the earlier flare-up, which separately saw the UAE engage 12 ballistic missiles, 3 cruise missiles, and 4 drones on Monday:
US Central Command (Centcom) says it has used helicopters to destroy Iranian small boats.
It follows US President Donald Trump's suggestion that the US has struck seven Iranian small boats as it works to open the Strait of Hormuz. "Earlier today, Sea Hawk and U.S. Army AH-64 Apache helicopters were used to eliminate Iranian small boats threatening commercial shipping", Centcom writes in a social media update.
Ceasefire Broken? Israel Awaiting US Greenlight, Trump Downplays
There remain lingering questions over whether the US-Iran ceasefire has definitively broken down with today's Iranian attack on the UAE, as well as tit-for-tat hostilities in the Persian Gulf area. This as Israeli media says the Netanyahu government is awaiting a 'green lig
ht' to attack Iran again. Also the UAE is now planning a 'severe retaliatory response' and 'harsh revenge' against Tehran, per MS Now.
Yet strangely, the latest statement out of CENTCOM doesn't touch on the question of a broken ceasefire, and President Trump himself has been silent on the matter, per the AP:
Cooper declined to say whether the exchange of hostilities between U.S. and Iranian forces in the Strait of Hormuz today amounted to an end to the ceasefire agreement. Cooper told reporters in a phone call this afternoon that Iran “initiated aggressive behavior” in the strait, according to a readout of the call provided by The Associated Press. “What we saw this morning was Iran initiating aggressive behaviors,” Cooper said. “We are simply going to respond to that.”
Trump's response:
UAE Threatens Military Response
A fresh official statement: "The United Arab Emirates strongly condemns the new Iranian attacks that targeted civilian sites and facilities in the country, using missiles, drones, and cruise missiles, which resulted in the injury of three Indian nationals."
"The Ministry of Foreign Affairs affirmed in its statement that these attacks constitute a serious and reckless escalation, and a blatant violation of the security and stability of the state, as well as a clear violation of the principles of international law and the United Nations Charter." And the UAE followed with the threat that it has the right to respond militarily against ongoing "aggression and provocation":
The UAE stressed that it will not tolerate any aggression against its security and sovereignty, and that it will respond with full force and firmness to these attacks, in a manner that fully protects its national security and the safety of its citizens and residents, in accordance with international law.
There are further confirmed reports of injuries and a fire at one or more oil facilities:
Three Indian nationals have been injured in the drone attack on Fujairah’s petroleum industrial site being blamed on Iran, the Fujairah Media Office says. The three have been taken to the hospital and their injuries have been termed “moderate”.
