US President Donald Trump has scrapped a proposal to impose a 20% toll on all cargo vessels transiting the Strait of Hormuz, marking a sharp reversal in Washington’s approach to the critical energy chokepoint.
The decision, reported by media outlets on Tuesday, follows feedback from Middle Eastern leaders who opposed the levy.
Instead of the toll, the administration is pursuing broader trade agreements with Gulf states.
The abandonment of the toll plan removes a significant potential cost burden for global shipping and energy markets.
The Strait of Hormuz handles roughly a fifth of the world’s oil supply, and any additional levy would have directly impacted freight costs and energy prices.
Markets had been pricing in heightened geopolitical risk following the initial announcement of the toll, which sparked concerns about trade disruptions and retaliatory measures.