US President Donald Trump has abandoned plans to impose a 20% fee on vessels transiting the Strait of Hormuz, signaling a shift toward broader trade and investment agreements in the Gulf region.
The announcement came during a meeting with Iraqi Prime Minister Ali al-Zeidi, where Trump stated that no one should charge a fee for passage through the critical waterway.
The reversal marks a significant de-escalation in the rhetoric surrounding one of the world’s most vital energy chokepoints.
Earlier reports had suggested the US was considering the toll as leverage in ongoing negotiations, a move that threatened to disrupt global oil flows and spike insurance premiums for tanker operators.
By dropping the proposal, the administration appears to be prioritizing diplomatic engagement and commercial stability over coercive economic measures.
Markets have responded cautiously to the news.