US President Donald Trump has officially abandoned plans to impose a 20% levy on cargo transiting the Strait of Hormuz, reversing a policy that threatened to disrupt global energy flows.
The decision follows an agreement with Gulf states, including Bahrain and Saudi Arabia, to channel significant direct investment into the United States.
This swap of protectionist tariffs for capital commitments marks a sharp de-escalation in Washington’s approach to the vital waterway.
The reversal removes a major overhang on shipping costs and insurance premiums for vessels navigating the narrow passage.
Markets had priced in substantial risk of transit delays and higher freight rates under the proposed tariff regime.
With the levy scrapped, immediate pressure on tanker equities and freight indices is likely to ease, though geopolitical tensions with Iran remain a background variable.