Donald Trump backs away from 20 per cent fee plan on Strait of Hormuz
US President Donald Trump has backed away from a proposal to charge a 20 percent fee for protecting the Strait of Hormuz as part of the conflict with Iran and said he would instead seek investment deals with Gulf countries.
US forces launched a wave of attacks for a third consecutive night after Tehran said it had closed the strait, prompting Trump to reimpose a blockade on Iranian ships and offer fees.
But less than five hours before the fee went into effect, Trump said the strait was open to all ship traffic except Iran.
“Based on very productive discussions with Middle East leaders, I have decided to replace the 20% US Reimbursement Fee with Trade and Investment Agreements between the various Gulf States with the US,” he said in a post on Truth Social on Tuesday US time (01:00 Wednesday AEST).
Oil futures prices pared their gains as of this writing, after rising early Tuesday. Worsening attacks have raised doubts that the memorandum signed last month will lead to a permanent halt to the war; This has disrupted global energy supplies and raised fears that inflation will rise globally.
Iran responded by attacking a US Army base in Jordan with ballistic missiles, while Bahrain, which hosts a US naval base, said Iran fended off an air attack. Jordan said four ballistic missiles were shot down and explosions were heard in Bahrain’s capital, Manama.
Before the war, approximately one-fifth of global oil and gas traffic passed through Hormuz daily. If the U.S. were to impose a 20 percent fee, it could generate revenues of approximately US$240 million ($344 million) per day.
The UN shipping agency said that it is against any fees related to the straits used in international navigation and that there is no legal basis for imposing mandatory tolls on strait crossings.
Reuters
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