Donald Trump backs away from 20 per cent fee plan on Strait of Hormuz
US President Donald Trump stepped back from a proposal to charge a 20 per cent fee to guard the Strait of Hormuz as part of the conflict with Iran, saying he would instead seek investment deals with Gulf states.
US forces had carried out waves of attacks for the third night in a row after Tehran said it had closed the strait, prompting Trump to reinstate a blockade of Iranian shipping and propose the fee.
But just a little under five hours before the fee had been due to come into effect, Trump said the strait was open to all shipping traffic except that of Iran.
“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,” he said in a post on Truth Social on Tuesday, US time (1am Wednesday AEST).
Oil futures prices pared their gains after the post after rising earlier on Tuesday. The worsening attacks had increased doubts that a memorandum of understanding signed last month would lead to a permanent halt in the war, which has disrupted global energy supplies and raised fears of a rise in inflation globally.
Iran had hit back by attacking a US Army base in Jordan with ballistic missiles while Bahrain, which hosts a US naval base, said it had fended off an Iranian aerial attack. Jordan said it had shot down four ballistic missiles and explosions were heard in Manama, Bahrain’s capital.
Before the war, about a fifth of global oil and gas traffic passed through Hormuz daily. If the US were to impose a 20 per cent fee, it could generate around $US240 million ($344 million) a day.
The UN shipping agency said it opposed any fees for straits used in international navigation and that there was no legal basis for introducing mandatory tolls on strait transits.
Reuters
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