Project Freedom drew blood. Markets shrugged.
Brent crude dropped $4.31 to $110.13 a barrel on Tuesday, giving back most of Monday's 5.8% spike. WTI fell $3.80 to $102.62. The OPEC basket slid to $116.54.
Monday was the most violent day in the Strait of Hormuz since the April 8 ceasefire. US helicopters sank six Iranian boats. Iran fired cruise missiles and drones at American destroyers and commercial ships. A drone hit an oil terminal in Fujairah. Two merchant vessels made it through the strait for the first time in weeks.
Then both governments said the ceasefire was fine.
What happened inside the strait
Two Arleigh Burke-class destroyers, USS Truxtun and USS Mason, pushed through the strait into the Persian Gulf under sustained Iranian fire. Attack helicopters, Apaches and Seahawks launched from the carrier group, sank six small Iranian boats that had gone after merchant ships in the convoy.
Iran launched cruise missiles at the destroyers and drones at the merchant ships. US forces intercepted all of them. Two commercial vessels cleared the strait heading the opposite direction, out of the Gulf. One was the Alliance Fairfax, a vehicle carrier operated by Maersk subsidiary Farrell Lines.
No US ships were hit. No American casualties were reported.
Iran told a different story
Fars News Agency reported that two missiles struck a US destroyer operating near Bandar-e-Jask, on the Gulf of Oman coast, forcing it to retreat after ignoring IRGC warnings to halt.
CENTCOM denied the claim. Admiral Brad Cooper said flatly that no US Navy ships had been struck.
The IRGC separately claimed that American forces killed five people aboard what Iranian state media described as "two small cargo boats," a framing that clashed with the Pentagon's account of armed fast boats targeting merchant shipping.
Both sides walked it back
The most striking part of Monday was not the fighting but what came after. Both capitals treated the clash as a manageable incident, not an escalation.
Gen. Dan Caine, Chairman of the Joint Chiefs of Staff, said Iran's attacks fell "below the threshold of restarting major combat operations at this point." Defense Secretary Pete Hegseth told reporters the ceasefire was not over.
Tehran did not disagree. Iranian officials framed the exchange as a limited reaction to what they described as American violations of the ceasefire terms, not a resumption of hostilities.
Markets read the signals. Brent gave back $4.31 on Tuesday after touching $114.44, the highest settlement of 2026, on Monday. Gold climbed $32 to $4,565.30, reversing Monday's safe-haven sell-off. Gasoline futures dropped 26 cents to $3.48 a gallon.
Two ships through does not reopen a trade route
Project Freedom put two merchant vessels through the strait. Roughly 800 remain trapped.
According to Kpler, some 166 tankers carrying an estimated 170 million barrels of crude and refined products remain stuck inside the Gulf. ADNOC CEO Sultan Al Jaber put the figure higher at a recent briefing: 230 loaded oil tankers waiting inside the waterway. The International Maritime Organization counts approximately 20,000 mariners and 2,000 ships stranded in the Persian Gulf.
Eurasia Group wrote Monday that Project Freedom "will not substantially raise shipping volume through the strait in the near term." The mines Iran planted in March remain uncleared. Insurance premiums remain punitive. And Monday's firefight gave underwriters no reason to revise their risk models downward.
Even under the best case, clearing the backlog could take three months once the strait fully reopens, according to Kpler analysts.
What to watch
Two things. First, whether a second convoy runs this week and under what conditions. Monday showed the Navy can push ships through, but at the cost of a firefight that neither side wants to repeat on a schedule. Second, the diplomatic channel. Iran's 14-point peace proposal remains on the table. Trump called it "not acceptable" but said discussions are "very positive." The next price move is more likely to come from that track than from another convoy.