Trump Drops Hormuz Fee Plan, Opts for Gulf Investment Deals Instead

President Donald Trump stepped back from a plan to charge a 20% escort fee for ships transiting the Strait of Hormuz on Tuesday, saying he would instead pursue investment deals with Gulf states — a reversal that came just hours before the fee was due to take effect and helped ease oil prices that had surged on renewed US-Iran fighting.

Fee Dropped in Favor of Investment Agreements

Trump announced Monday that the US would reinstate a blockade on Iranian shipping and charge a 20% fee for US military protection through the strait — a measure the UN shipping agency said had no legal basis under international law. But less than five hours before the fee was to enter force at 8 p.m. GMT Tuesday, Trump reversed course.

“Based on highly productive conversations with Middle East leadership, 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, adding that the strait was now open to all shipping traffic except Iran’s.

Oil futures pared their gains following the announcement, having climbed sharply earlier in the day. Before the war, the Strait of Hormuz carried roughly one-fifth of global daily oil and gas traffic. A 20% fee on that volume could have generated approximately $240 million per day.

Three Consecutive Nights of US Strikes on Iran

The reversal came after US forces carried out attacks on Iranian targets for a third consecutive night. Iran had declared the strait closed, triggering Trump’s initial announcement of the blockade and fee proposal on Monday.

Iran responded by launching ballistic missiles at a US Army base in Jordan — which Jordan said it shot down — and mounting an aerial attack on Bahrain, home to the US Navy’s 5th Fleet, which Bahrain said it repelled. Explosions were reported in Manama, Bahrain’s capital.

Ceasefire Memorandum Under Severe Strain

The escalating exchanges have cast deep doubt over the memorandum of understanding signed last month between the US and Iran, which was intended to pause hostilities and create a 60-day window for permanent peace negotiations. The worsening Trump Hormuz fee Gulf investment deals standoff has disrupted global energy supplies, pushed oil prices significantly higher, and raised fears of sustained inflationary pressure worldwide.

The UN’s International Maritime Organization said it opposed any fees for internationally recognized straits and that there was no legal basis for imposing mandatory tolls on Hormuz transit — reinforcing the legal and diplomatic obstacles Trump’s original proposal would have faced.