US President Donald Trump has abandoned plans to impose a 20% levy on all cargo vessels transiting the Strait of Hormuz, marking a sharp reversal in Washington’s approach to the critical energy chokepoint.
The decision, announced on Tuesday, follows consultations with Middle East partners and replaces the proposed toll with a strategy to seek compensation from Gulf allies through trade deals.
The Strait of Hormuz remains the world’s most vital oil transit route, and the prospect of a 20% fee had sparked fears of significant freight rate spikes and supply chain disruptions.
Despite dropping the universal levy, the administration confirmed it will continue to bar passage for all Iranian-linked ships, maintaining the core of its maritime pressure campaign against Tehran.
The withdrawal of the toll proposal alleviates immediate concerns among global shippers and energy traders regarding the potential for a new, universal cost layer on oil and gas exports.
The Strait of Hormuz remains the world’s most vital oil transit route, and the prospect of a 20% fee had sparked fears of significant freight rate spikes and supply chain disruptions.
By pivoting to bilateral trade negotiations with Gulf states, the US aims to secure financial support without directly penalizing the broader commercial shipping industry.