Key Takeaways
- US President Donald Trump withdrew a proposal to charge a 20% transit fee for the Strait of Hormuz.
- Iran reported new strikes on its islands and provinces following US attacks.
- Oil prices rose slightly after reports of renewed tensions in the region.
US President Donald Trump announced on Tuesday that he would abandon a controversial proposal to charge a 20% transit fee for ships passing through the Strait of Hormuz, instead opting for trade and investment deals with Gulf states. The move came just under five hours before the fee was due to take effect at 2000 GMT.
In a statement posted on Truth Social, Trump stated, '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.'
The decision followed a series of attacks by Iran against US military assets in the region. On Tuesday evening, Iran reported strikes on its Qeshm Island and Kish Island, as well as explosions in Andimeshk, southern Khuzestan province. The governor’s office of Qeshm Island confirmed that it was hit by a US projectile.
Iranian state media also reported an explosion near a water and electricity facility on Kish Island, while the semi-official Tasnim news agency stated that a US projectile had exploded there. State media in Iran further reported an explosion heard in Andimeshk, southern Khuzestan province.
In response to these attacks, the United States carried out waves of strikes for the third consecutive night. The US military has not disclosed details of its operations, but reports suggest that multiple projectiles were launched into Iranian territory.
The escalating tensions have raised concerns about a potential permanent halt in the conflict, which has disrupted global energy supplies and increased fears of inflation. Shippers had previously opposed the Hormuz fee plan, with the UN shipping agency stating that there was no legal basis for introducing mandatory tolls on strait transits.
Germany’s Hapag-Lloyd, one of the world's largest container shipping companies, expressed strong opposition to the fee proposal, calling it 'fundamentally wrong.'
Trump later stated in a tweet that he did not like the concept of a fee for using the strait and said countries had called him to say they wanted to invest in the U.S. instead of being charged a fee. However, it was unclear what specific commitments or agreements were made by Gulf states.
The move to impose US fees drew sharp criticism from various quarters, including the UN shipping agency which opposed any fees for straits used in international navigation.
