Trump steps back from proposal for Hormuz fees in favour of Gulf investment deals

President Donald Trump has withdrawn a proposed 20% fee intended to guard the Strait of Hormuz, opting instead for trade and investment deals with Gulf states. The announcement came after "highly productive conversations with Middle East leadership," Trump stated on Truth Social. This move shifts the strategy away from a financial charge related to the conflict with Iran, which had prompted a blockade of Iranian shipping and the fee proposal earlier in the week.

Oil futures prices saw their gains pared following Trump's post, after having risen earlier in the day. The escalating attacks in the region had previously cast doubt on a recent memorandum of understanding aimed at a permanent halt to the war, which has disrupted global energy supplies and fueled inflation fears. Iran had retaliated with attacks on a U.S. Army base in Jordan, while Bahrain reported fending off an Iranian aerial assault.

Before the recent tensions, approximately one-fifth of global oil and gas traffic transited through Hormuz daily. The U.S. had estimated that the 20% fee could generate around $240 million per day. The United Nations shipping agency had previously opposed any fees for internationally navigated straits, citing a lack of legal basis for mandatory tolls.

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Based on highly productive conversations with Middle East leadership, I have decided to replace the 20 per cent United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States.