US President Donald Trump has abandoned plans to impose a 20% fee on cargo vessels transiting the Strait of Hormuz, marking a sharp pivot in Washington’s approach to the critical waterway.
The proposed charge, which had sparked concern among global shippers and energy traders, will instead be replaced by trade and investment agreements with Gulf states, according to a post on Truth Social.
The decision comes after what Trump described as "very productive talks" with Middle Eastern leaders.
By swapping a unilateral transit tax for bilateral commercial deals, the administration appears to be seeking a more cooperative framework with Gulf partners, potentially easing diplomatic friction while still securing economic benefits for the US.
For markets, the move removes a significant overhang that had threatened to disrupt one of the world’s most vital energy chokepoints.
The Strait of Hormuz handles roughly a fifth of global oil consumption, and any additional cost or friction in the corridor would have likely triggered immediate repricing in crude and freight rates.