Trump scraps 20% Hormuz fee in favour of Gulf trade deals as US strikes hit Iran's nuclear port city
Hours after a third wave of US airstrikes hit targets near Iran's sole nuclear plant and its oldest refinery, President Trump abandoned a planned 20 percent levy on ships transiting the Strait of Hormuz, replacing it with bilateral investment agreements with Gulf states.
A sudden reversal on transit fees
On Monday President Donald Trump announced a 20 percent charge on the cargo value of all vessels passing through the Strait of Hormuz to recover the cost of American military protection. By Tuesday afternoon he had scrapped the idea entirely, posting on Truth Social that after conversations with Middle Eastern leaders he would substitute that levy with “trade and investment agreements that various Gulf states will conclude with the USA.” The New York Times noted that Vice-President J.D. Vance and Secretary of State Marco Rubio had publicly opposed any toll on international waterways for months.
Such fees would violate international law.
The reversal came on the same day that US Central Command began enforcing a full blockade of ships bound for or departing Iranian ports, a measure Trump said was a response to Iranian attacks on merchant vessels in the strait. Enforcement was to start at 22:00 Polish time on Tuesday.
Oil is flowing like never before thanks to the extraordinary might of the United States Armed Forces. The Strait of Hormuz is open to ALL ships except Iran — because of its lying, brutal and vicious leadership, which is driving that country to TOTAL DESTRUCTION.
Strikes spread along the Persian Gulf coast
Iraqi state media and Reuters reported explosions just after 10:30 a.m. Warsaw time (8:30 GMT) on Tuesday. Vice-Governor Ehsan Dżahanian of Bushehr province told the IRNA agency that four sites in the city of Bushehr were struck by enemy missiles, pointing to the United States. Bushehr hosts Iran's only nuclear power station, but it was not confirmed whether the plant itself was hit. American forces also struck facilities in Abadan, site of the Middle East's oldest oil refinery, and in the petrochemical port of Mahshahr, according to Khuzestan Vice-Governor Waliollah Hadżati.
The overnight and morning attacks followed a weekend seizure of two ships by Iran's Revolutionary Guard navy in the Strait of Hormuz. CENTCOM said the US strikes were ordered to deprive Tehran of the ability to target commercial shipping, hitting dozens of military installations. Iran responded by declaring the strait closed until further notice.
- Iran's Revolutionary Guard navy seizes two ships in the Strait of Hormuz, accusing them of illegal navigation.
- CENTCOM announces US airstrikes aimed at degrading Iran's ability to attack merchant shipping.
- Trump declares a 20 percent levy on all cargo transiting Hormuz and announces a blockade of Iranian port traffic.
- Overnight US strikes continue for a third consecutive night; Iran declares the Strait of Hormuz closed.
- Four sites in Bushehr are hit at 8:30 GMT; explosions also reported in Bandar Abbas, Abadan and Mahshahr.
- Trump announces the 20 percent fee is replaced by trade and investment agreements with Gulf states.
- Enforcement of the US blockade of Iranian ports begins at 22:00 Polish time.
Tehran threatens a second chokepoint
With the Hormuz already disputed, Iran signalled through its Houthi allies that it could throttle the Bab al-Mandab strait, linking the Red Sea to the Gulf of Aden. Reuters quoted senior Houthi official Mohammed al-Farah warning that an operational alliance would close both waterways if the situation deteriorated, pushing oil prices to $200 per barrel. Professor Fawaz Gerges of the London School of Economics said Iran was ready to “go all out” to confront Washington.
Iran is ready to go all out — to show the Americans that it can threaten two strategic chokepoints at once and turn this war from a bilateral conflict into a challenge for global energy trade.
The Bab al-Mandab carries roughly 30 percent of global container traffic, 10 percent of all seaborne goods and 8–10 percent of oil and gas, according to The Economist. Saudi Arabia, the world's third-largest producer after the US and Russia, ships much of its crude through the narrow passage. Houthi forces had already demonstrated the ability to almost completely blockade the strait after the Gaza conflict ignited in late 2023, forcing carriers to reroute around Africa.
- Container traffic
- 30 %
- Total seaborne goods
- 10 %
- Oil and gas
- 9 %
Iran insists oil exports will continue
Despite the US blockade, Iranian Oil Minister Mohsen Paknedjad said the ministry had preserved all mechanisms developed over years to circumvent American sanctions. During the 60-day suspension of restrictions that preceded the current escalation, Iran exported at least 57 million barrels of crude, according to Bloomberg, maintaining a daily rate of at least 2.2 million barrels.
Since the structures needed to sustain Iranian oil exports have been preserved, exports will continue as before and we will have no problems in this regard.
Iran's parliament also began work on a bill for permanent control of the Strait of Hormuz and the Persian Gulf, state media reported. The legislation would give Tehran legal cover for the permanent inspection of traffic through the waterway that carried 20 percent of global oil and gas exports before the war.
