Trump scraps 20% Hormuz transit fee, swaps it for Gulf investment deals as US-Iran strikes intensify

The U-turn

Less than 24 hours after declaring himself "guardian" of the Strait of Hormuz and vowing to impose a 20% charge on vessels transiting the chokepoint, Donald Trump reversed course. In a Truth Social post on Tuesday he said he would replace the reimbursement fee with bilateral trade and investment agreements that Gulf states will carry out in the United States.

Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% Reimbursement Fee with Trade and Investment Agreements that the various Persian Gulf States will make in the United States.

The president described the coming investments as "MASSIVE" and promised they would create factories, plants and equipment at historic levels and generate millions of well-paying American jobs. The move came after what Trump characterised as a request from Gulf leaders to structure the relationship differently.

I never thought it was fair that we guard the Strait when we don't need the oil at all, but it is important for our allies, for people we get along with.

Blockade narrowed to Iranian-linked ships

Despite abandoning the universal toll, Trump kept a naval blockade in place. He now clarified it will apply only to vessels sailing to or from Iranian ports, or carrying any Iranian cargo. "The Strait of Hormuz is open to all maritime traffic, except for Iran," he wrote, accusing Tehran's leadership of being "lying, violent and malicious" and driving the country toward "total destruction."

The blockade tightens the pressure on Iran, which had already been effectively shut out of the strait during the renewed hostilities. The US had attacked Iran in the early hours of Tuesday, hours after Trump announced the original toll and described the blockade as a restoration of US control.

Military escalation on the water

Fighting continued through Tuesday. Iranian forces struck two Emirati oil tankers, killing one Indian crew member and wounding at least eight others, six of them seriously. The US military, for its part, bombed targets along Iran’s southern coast with the stated aim of degrading Tehran’s ability to disrupt maritime traffic in the strait. Trump also formally notified Congress that hostilities had resumed, three weeks after signing a memorandum of understanding on 17 June that had paused the war.

Iran’s military insisted it would not surrender any control over the waterway. "The armed forces will not cede an inch over the Strait of Hormuz," a statement carried by Deutsche Welle said. Tehran continues to argue that the June memorandum gave it authority over the strait, including the right to collect tolls.

Oil markets whipsawed

The initial 20% toll announcement sent crude prices soaring, given that a fifth of globally traded oil and gas normally passes through Hormuz. Brent touched more than $87 a barrel and US West Texas Intermediate reached $81.23 before Trump’s reversal pulled prices back. By the close Brent stood at $84.50, still up 1.5% on the day, while WTI hovered around $79. The initial intraday spike had been close to 5%.

The moderation reflected an easing of the most acute cost threat, though oil remains above pre-announcement levels. The episode showed how quickly a policy pronouncement can rattle a market already on edge from the first US-Iran war in decades and from persistent cost-of-living pressures worldwide.