Key takeaways:
- Trump reversed his plan to impose a 20% Strait of Hormuz cargo fee and said Gulf states would instead make trade and investment deals with the US.
- US Central Command said a naval blockade of Iranian ports would resume at 16:00 Eastern Time on Tuesday.
- Shipping through the Strait of Hormuz has slowed to a two-month low, while Brent crude prices have risen sharply, according to the BBC.
President Donald Trump has abandoned his threat to impose a 20% fee on cargo moving through the Strait of Hormuz, replacing the plan with proposed trade and investment deals with Gulf states as the United States prepares to resume a naval blockade of Iranian ports.
The reversal came Tuesday, one day after Trump said Washington would charge vessels using the strategic waterway to cover the cost of securing it. The Strait of Hormuz has become a central flashpoint in the escalating conflict between the US and Iran, with tanker traffic slowing sharply and oil prices rising after renewed attacks across the region.
“I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States,” Trump wrote on Truth Social. “Those Investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future.”
Trump provided no details on the proposed deals. Al Jazeera reported that several countries in the region had already announced multibillion-dollar pledges to invest in the US before the US and Israel launched strikes against Iran on February 28.
Speaking later after talks in Washington with Iraqi Prime Minister Ali al-Zaidi, Trump said he had shifted course after receiving numerous calls from Gulf leaders. “I don’t like the concept of a fee, but at the same time, it’s not fair that we’re protecting this Strait for the entire world,” he said.
The US president also said the strait “is open to ALL Ship traffic except for Iran” and that “oil is flowing like never before, thanks to the awesome Power of the United States Military”. Shipping data cited by the BBC showed traffic through the waterway has slowed to a two-month low, while benchmark Brent crude prices have risen sharply.
US Central Command said Monday that the naval blockade of Iranian ports would take effect from 16:00 Eastern Time on Tuesday. Al Jazeera reported that the blockade had previously been lifted under a memorandum of understanding signed in mid-June, which also ended fighting between the two sides and reopened the Strait of Hormuz.
The latest escalation followed renewed US and Iranian strikes. The US said it had carried out a third night of attacks intended to reduce Iran’s ability to target shipping in the area. Iranian state media reported explosions Tuesday in multiple cities, including Bushehr, where a nuclear power plant is located. Al Jazeera reported attacks in Bushehr, Bandar Abbas, Mahshahr and Abadan, with explosions also reported on Qeshm and Kish islands.
Tehran said it had targeted US military facilities in Bahrain and Jordan after earlier striking two United Arab Emirates tankers, the BBC reported. Al Jazeera said other attacks had been reported on Bahrain, Jordan and vessels in the Strait of Hormuz, and that Iran had vowed to continue attacks on US assets in the region. Kuwait said its armed forces were engaging several aerial targets.
The conflict has highlighted the economic importance of the Strait of Hormuz, through which about 25% of the world’s oil and 20% of global liquefied natural gas previously passed, according to the BBC. Iran effectively shut down the waterway after the US and Israel launched strikes against Iran on February 28.
Israel also issued a warning Tuesday. Prime Minister Benjamin Netanyahu said in a video posted on social media that Israel’s retaliation against Iran would be “much more powerful” if attacked first. “I will say it to the leaders of Iran: Do not count on things remaining quiet if you attack us,” he said.
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