Trump's Strait of Hormuz Plan Falters Amid Stalled Iran Peace Talks and OPEC+ Output Hike

President Donald Trump announced a U.S. initiative, dubbed “Project Freedom,” to release cargo ships stranded in the Strait of Hormuz due to the ongoing conflict with Iran. The operation, starting Monday, aims to assist neutral countries caught in the blockade amid escalating tensions.

Despite this move and a modest oil output increase by OPEC+ members, peace talks between the U.S. and Iran have stalled, leaving shipping lanes blocked and markets largely unmoved. The fragile calm in oil prices and stock futures underscores the uncertainty surrounding the conflict’s resolution.

OPEC+ Boosts Oil Production Amid Strait of Hormuz Blockade

Seven OPEC+ countries agreed to raise oil production by 188,000 barrels per day in June, marking the third consecutive monthly increase. However, with the Strait of Hormuz effectively closed, the real impact of this output hike is limited. This meeting was the first since the United Arab Emirates unexpectedly left the group last week.

Oil prices dipped slightly, with Brent crude falling below $107 per barrel and U.S. West Texas Intermediate crude hovering around $101. Meanwhile, S&P 500 futures inched higher as investors weighed ongoing geopolitical risks.

Trump’s 'Project Freedom' to Free Stranded Ships

President Trump announced plans to begin freeing cargo ships trapped in the Strait of Hormuz, calling it a “humanitarian gesture” for neutral nations not involved in the U.S.-Israeli conflict with Iran. Details on the operation remain scarce, but the effort is set to commence on Monday.

Earlier, Iran confirmed it received a U.S. response to its 14-point peace proposal. Trump indicated he had not reviewed the full text but suggested rejection was likely, stating Iran had not “paid a big enough price.” Iranian officials declared nuclear negotiations off the table until a ceasefire and mutual lifting of blockades occur.

Energy Markets and Geopolitical Tensions

Amid disruptions in Gulf oil flows, U.S. crude exports surged to a record 5.2 million barrels per day in April, a 30% increase since February. U.S. Treasury Secretary Scott Bessent forecasted that energy prices, which have spiked since the war began in late February, are expected to ease later this year.

Tensions extend beyond the Middle East. China’s Commerce Ministry blocked U.S. sanctions targeting five Chinese refiners accused of purchasing Iranian crude, signaling rising friction between Beijing and Washington ahead of an upcoming meeting between Trump and Chinese leader Xi Jinping.

Global Finance Leaders Monitor Market Volatility

Finance ministers from China, Japan, South Korea, and ASEAN convened on the sidelines of the Asian Development Bank’s annual meeting in Uzbekistan, expressing readiness to respond to market volatility. The bank also announced a $70 billion initiative to expand energy grids and digital infrastructure across the Asia-Pacific region by 2035.

Berkshire Hathaway’s Buffett Warns of Gambling Mood in Markets

At Berkshire Hathaway’s annual meeting, CEO Greg Abel discussed the company’s strategic use of artificial intelligence and efforts to enhance its railway and insurance businesses. Warren Buffett, in a rare interview, cautioned that the current investing environment is far from ideal.

"Markets are like a church with a casino attached. More people are in the church, but the casino has become very attractive. Buying or selling one-day options isn’t investing or speculating—it’s gambling. We've never seen people in a more gambling mood than now."—Warren Buffett

Looking Ahead: Fragile Calm Amid Uncertain Peace Prospects

While markets have so far absorbed the stalled peace talks and limited oil supply changes with relative calm, the situation remains volatile. The success of “Project Freedom” and any progress in U.S.-Iran negotiations will be critical in shaping energy prices and global market stability in the coming weeks.