Renewed Iran hostilities strain Saudi-US relations

Did Saudi Arabia put the brakes on a US military operation in the Gulf? Reporting in the Wall Street Journal and Financial Times claimed Riyadh told the Trump administration last week that US warplanes wouldn’t be flying out of Saudi bases or through Saudi airspace for the US push to resume commercial shipping through the Strait of Hormuz. Kuwait reportedly took the same line and, within 36 hours of the operation kicking off, President Donald Trump paused the whole thing.

“Project Freedom” was supposed to be a show of strength. US destroyers, fighter jets, drones, and surveillance aircraft would shepherd commercial vessels through a narrow corridor cleared of Iranian mines — what US Defense Secretary Pete Hegseth called a “red, white and blue dome” over the strait. However, the plan relied entirely on regional bases and airspace to work. Once Riyadh and Kuwait City pulled the plug on access, the operation lost its physical footing.

US media had interesting details: Crown Prince Mohammed bin Salman reportedly spelled this out directly to Trump in a phone call Tuesday evening, telling him about the access restrictions and urging him to stand down. The operation got paused the same day, and Trump later framed the climbdown publicly as a favor to Pakistan and “other countries.”

Later reports are saying an off-ramp came Wednesday night. A second call between Trump and the Crown Prince cleared the way for Saudi and Kuwaiti access to be reinstated, and Pentagon officials are now floating a restart of Project Freedom as soon as this week. The White House, for its part, insists there was never a ban — calling that framing “fake news” and saying allies were notified in advance.

Why it matters

The reporting paints a picture of a kingdom increasingly uneasy with what it sees as Trump's improvisational approach to a war that has put Gulf states — not the US — directly in Iran's line of fire. People briefed on the talks told the FT that Riyadh saw Project Freedom as “unnecessarily escalatory and not well thought through.”

Iran answered the launch of Project Freedom by firing more than a dozen missiles and drones at the UAE, setting an oil facility at Fujairah ablaze. It also fired cruise missiles at US warships and commercial vessels.

The last straw was the US response — or lack of one. Joint Chiefs Chairman Dan Caine reportedly described the Iranian strikes as low-level harassment, and Trump himself said it wasn’t “heavy firing.” For Riyadh, that signaled Washington wouldn’t back the Gulf up if Tehran kept lashing out.

The pushback is “probably a signal by the Saudis that they’re feeling a little bit neglected and tired of the improvisation,” Brookings’ Michael O’Hanlon told CNBC. Still, it’s unlikely to be a durable outcome as the US security alliance is just still too important, O’Hanlon said.

Hormuz Watch: crickets

The Strait of Hormuz has been effectively closed to commercial shipping since Tuesday, after US and Iranian forces traded blows overnight near the waterway. Bloomberg ’s vessel-tracking data shows zero observed inbound or outbound transits since then.

What triggered the latest halt: US forces hit missile and drone launch sites inside Iran that Washington said were behind attacks on three US warships transiting the strait. Tehran has tightened its own grip in parallel, now requiring shipowners to file detailed paperwork — vessel histories, cargo values, the lot — with its newly established Persian Gulf Strait Authority before any voyage. The combination has all but emptied the waterway.

A double blockade: Iran is obstructing traffic from one side, and the US is preventing ships from calling at or leaving Iranian ports from the other. US Central Command says American forces are currently holding more than 70 tankers — with combined capacity of over 166 mn barrels of oil — out of Iranian ports.

Wall Street has stopped expecting a quick fix. A Goldman Sachs poll conducted 4-6 May found a majority expect Hormuz flows to stay disrupted past the end of June, with 43% not expecting normal shipping until after July. A third see Brent finishing the year between USD 80-90 a barrel. Goldman's clients also flagged short oil as a favored trade if and when the strait reopens, with options markets showing sustained demand for downside protection — traders are hedging against a sudden de-escalation as much as further escalation.