Oil Prices Decline as U.S. Launches 'Project Freedom' to Clear Strait of Hormuz

Oil prices fell in choppy trade Monday, as market participants assess U.S. President Donald Trump's announcement to "free" ships that have been trapped due to the closure of the Strait of Hormuz, amid lingering tensions between Tehran and Washington.

International benchmark Brent crude futures fell 0.35% to $107.77 per barrel, while U.S. West Texas Intermediate futures were down 0.57% at $101.31 per barrel.

As the Hormuz Strait continues to face a blockade, traffic via the critical energy waterway that saw about a fifth of the world's energy supplies transit through it prior to the war, has come to a near standstill.

The United Kingdom Maritime Trade Operations agency said Monday that a tanker was hit by projectiles north of the city of Fujairah in the United Arab Emirates, underscoring the dangers for ships navigating the Mideast region.

Trump said in his Truth Social post Sunday that the U.S. would attempt to "free" stranded cargo ships affected by the Strait of Hormuz closure since the start of the Iran war.

Dubbed "Project Freedom," the effort will focus mainly on getting civilian ships flagged in countries not affiliated with the conflict out of the waterway so they can "freely and ably get on with their business." It is set to begin on Monday, Middle East time.

"U.S. military support to Project Freedom will include guided-missile destroyers, over 100 land and sea-based aircraft, multi-domain unmanned platforms, and 15,000 service members," the U.S. Central Command said shortly after Trump's announcement.

Traders will also be assessing OPEC+ agreeing to an oil output increase of 188,000 barrels per day, in the cartel's first meeting since the exit of its key member, the United Arab Emirates.