Trump Scraps Strait of Hormuz Shipping Fee for Gulf Investment Deals

The abrupt policy shift occurred just five hours before the toll was scheduled to take effect. While he abandoned the toll, he maintained that the US will continue to blockade Iranian ports.

Gulf Investment Deals and the Hormuz Toll Reversal

Trump’s initial proposal on Monday would have seen the US control the strait and charge a 20% tariff on all cargoes for safe passage. This move contradicted previous US positions that no country should charge fees for international navigation.

During a meeting with Iraqi Prime Minister Ali al-Zaidi, Trump claimed that Kings and Emirs are eager to invest billions and billions of dollars into the US. He specifically named Saudi Arabia, Qatar, the UAE, Bahrain, and Kuwait as countries that would welcome such investments.

The shift has drawn sharp criticism from lawmakers. Senate Minority Leader Chuck Schumer stated that Trump has no clue what he’s doing in Iran. Additionally, Democrats on the Joint Economic Committee estimate that the ongoing Iran war has already cost Americans $56.4 billion more in gasoline expenses.

Three Days of Escalated Airstrikes and Blockades

The diplomatic pivot happened against a backdrop of violent military exchanges. US Central Command launched operations early Tuesday that hit targets across Iran, specifically focusing on the port cities of Bandar Abbas and Bushehr. The military stated these strikes were designed to degrade Iran’s ability to attack commercial shipping.

The US Navy-led Joint Maritime Information Center confirmed the enforcement of a blockade covering all Iranian oil terminals, coastal areas, and ports.

• Bahrain: Iran targeted the nation that houses the US Navy’s fifth fleet; Bahrain reported intercepting several attacks and accused Iran of targeting civilians in Manama.
• Jordan: The country, which hosts US air force assets, intercepted four Iranian missiles.
• UAE: Two national tankers were hit by Iranian cruise missiles in Omani territorial waters.
• Kuwait: The army reported intercepting hostile projectiles on Tuesday evening.

This prompted the Indian foreign ministry to summon Iran’s deputy ambassador to lodge a strong protest.

For more on this story, see Trump Scraps Hormuz Shipping Fee to Pursue Gulf Investment Deals.

Economic Volatility and Aviation Risks

Energy markets reacted quickly to the instability. Brent crude oil rose 7.8% to $81.92 a barrel on Monday. While this is a recent spike, it remains significantly lower than the nearly $120 (£90) peak seen during the height of the war.

Air travel in the region is also under threat. The European Union Aviation Safety Agency warned airlines to avoid the airspace of the UAE, Qatar, Kuwait, Bahrain, and the Gulf of Oman, citing unpredictable military developments that pose a risk to civil flights.

The Collapsing 60-Day Truce Framework

The current hostilities represent a near-total collapse of an interim memorandum of understanding (MoU) intended to end the conflict that began in February with the assassination of Iran’s supreme leader, Ali Khamenei. The two nations are now nearly halfway through a 60-day negotiation window meant to secure a permanent truce.

Progress on the MoU has stalled on three primary fronts: the reopening of the strait, Iran’s nuclear program, and broader regional issues. While the US asserts that neutral transit through the strait will not be impeded, Iran’s foreign minister, Abbas Araghchi, has insisted that Tehran alone will be the guardian of the waterway.

The legal authority for these actions is also under scrutiny. Trump sent formal notification to Congress on July 7 stating that hostilities against Iran had resumed. His administration views this as a new 60-day window to operate the military without congressional approval, a move that critics argue misinterprets the War Powers Act.

As the US continues its strikes, Israeli Prime Minister Benjamin Netanyahu warned Iran against further attacks at a conference in Dimona.

US attacks have killed at least 28 people since last week, according to Agence France-Presse. The situation remains volatile as both sides continue to exchange drone and missile strikes, leaving the future of the 60-day truce uncertain.

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