U.S. President Donald Trump withdrew a plan to impose a 20 percent fee on cargo passing through the Strait of Hormuz one day after announcing it, following objections from key Gulf allies. The reversal came as Washington maintained military pressure on Iran through a resumed naval blockade and additional strikes.
Trump stated that anticipated revenue from the fee would instead be offset by direct investments from Gulf states into the United States. He held discussions with representatives from Saudi Arabia, Qatar, Bahrain, Kuwait and the United Arab Emirates, who advocated for financial commitments rather than a transit charge. Trump expressed preference for large-scale investments over the fee structure.
It remained uncertain whether any Gulf governments had committed to new pledges. At least one regional authority indicated it had not agreed to expand existing financial arrangements in return for dropping the fee. Energy Secretary Chris Wright confirmed the proposal was no longer under consideration and that no tolls would apply to traffic through the strait.
Oil prices rose in response to the developments. Brent crude futures settled nearly 2 percent higher at $84.73 a barrel, the highest level in about a month.
The administration continued its military campaign in the region. Fresh U.S. strikes targeted Iranian sites while a blockade on Iranian shipping remained in place. In a television interview, Trump warned that operations could extend to power stations and bridges next week unless Iran entered negotiations, repeating threats issued in prior weeks.
Analysts calculated that the scrapped fee would have raised U.S. gasoline prices by about 37 cents per gallon. Trump has raised the idea of U.S.-collected charges on the strait since early April, leaving open the possibility that a similar measure could return.
Trump stated that anticipated revenue from the fee would instead be offset by direct investments from Gulf states into the United States. He held discussions with representatives from Saudi Arabia, Qatar, Bahrain, Kuwait and the United Arab Emirates, who advocated for financial commitments rather than a transit charge. Trump expressed preference for large-scale investments over the fee structure.
It remained uncertain whether any Gulf governments had committed to new pledges. At least one regional authority indicated it had not agreed to expand existing financial arrangements in return for dropping the fee. Energy Secretary Chris Wright confirmed the proposal was no longer under consideration and that no tolls would apply to traffic through the strait.
Oil prices rose in response to the developments. Brent crude futures settled nearly 2 percent higher at $84.73 a barrel, the highest level in about a month.
The administration continued its military campaign in the region. Fresh U.S. strikes targeted Iranian sites while a blockade on Iranian shipping remained in place. In a television interview, Trump warned that operations could extend to power stations and bridges next week unless Iran entered negotiations, repeating threats issued in prior weeks.
Analysts calculated that the scrapped fee would have raised U.S. gasoline prices by about 37 cents per gallon. Trump has raised the idea of U.S.-collected charges on the strait since early April, leaving open the possibility that a similar measure could return.