President Donald Trump announced Tuesday that the U.S. is reversing its plan to impose a 20% security fee on cargo passing through the Strait of Hormuz, opting instead for incoming trade and investment commitments from Gulf nations.
The policy shift occurs as a recent interim maritime agreement between the U.S. and Iran lies in tatters, replaced by a fresh escalation of military strikes that threatens to destabilize global energy markets.
“Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States,” Trump announced on social media. The president added that the upcoming investments “will be MASSIVE,” though official details have not yet clarified if these constitute new commitments beyond those discussed during his visit to the Middle East last year.
The reversal follows a sharp exchange of military actions earlier in the day that effectively dismantled the interim diplomatic framework, which had been designed to pause regional hostilities, keep the strategic waterway open, and grant negotiators time to draft a permanent peace agreement.
Instead, renewed fighting has disrupted the vital shipping corridor, through which one-fifth of the world’s traded crude oil and natural gas passes during peacetime. Iran has previously utilized attacks and threats against commercial vessels as a primary strategic leverage point, effectively closing the passage and driving up the global prices of oil, fertilizer, and consumer goods.
The latest instability has triggered widespread economic concerns and prompted safety warnings for commercial airlines operating in the region. International benchmark Brent crude oil prices rose above $86 a barrel on Tuesday following the initial market friction.
The breakdown of the interim agreement follows recent statements by President Trump, who described the underlying memorandum of understanding with Iran as an intentional test of Tehran’s reliability rather than a final pact. In a radio interview with host Hugh Hewitt, Trump asserted that the Iranian government had failed to honor the diplomatic trial.
“It was built to test,” Trump said during the interview. “It was a test. We didn’t know. It didn’t, look, memorandum of understanding, when you’re dealing with sleazebags, it [doesn’t] mean much. And they don’t mean much when you’re dealing with honorable people, too, because it’s a memorandum of understanding. It doesn’t mean much.”
Trump defended the preliminary approach as a standard American negotiating tactic, though he noted he had initially favored bypassing it. “I said why are we even, you know, it’s a standard tactic in the U.S. that you go to a memorandum of understanding, and then you go to the deal. I said just go to the deal first. But you know why? It was sort of a test. And they weren’t there. They didn’t honor the test. We had it. We had this deal settled numerous times, and I said watch. I guarantee, watch, and they never, they never followed it.”
Prior to the current escalation, Iran’s Persian Gulf Strait Authority reported that more than 200 foreign commercial vessels had successfully coordinated transit through the northern route of the strait under the short-lived three-week framework. However, Iran declared the passage closed over the weekend, citing American provocations. The U.S. maintains that the waterway remains open via a southern route near the coast of Oman, with Trump reiterating in a Newsmax interview that the U.S. intends to retain operational control of the strait and reinstate a naval blockade on Iranian ports.
The proposed transit fees had initially drawn swift criticism from the commercial shipping sector before being rescinded. German logistics giant Hapag-Lloyd rejected the policy prior to the reversal, stating that the Strait of Hormuz consists of international waters rather than man-made infrastructure. Oman’s Foreign Ministry also announced it is working with all parties to restore unhindered transit in accordance with the United Nations Convention on the Law of the Sea.
On the ground, the military escalation has intensified. The U.S. military conducted a third consecutive night of airstrikes against Iranian targets on Monday. According to U.S. Central Command, the five-hour operation utilized combat sea drones for the first time to strike a naval base, alongside targets in the port cities of Bandar Abbas and Bushehr. Local officials in Bushehr, home to Iran’s civilian nuclear power plant, reported that four projectiles hit the city.
Iran responded with retaliatory cruise missile strikes on two oil tankers, the MT Al Bahiyah and MT Mombasa, near the coast of Oman. The Ministry of External Affairs in India confirmed that one Indian national was killed and 10 others were injured in the tanker attacks, leading New Delhi to summon an Iranian diplomat to lodge a formal protest. Air defense sirens also sounded for a third time in Bahrain, home to the U.S. Navy’s 5th Fleet, as authorities warned residents to take shelter amid Iranian missile fire. Regional strikes also targeted locations in Jordan.
Simultaneously, separate diplomatic discussions continue in Rome regarding the conflict in Lebanon. Israeli Foreign Minister Gideon Saar announced that Israel is prepared to move forward with a late-June agreement to withdraw troops from two designated “pilot zones” in southern Lebanon, allowing Lebanese government forces to assume control.
“We are ready to move forward implementing these two pilot zones,” Saar told reporters in Jerusalem. “I hope and tend to believe that this round of discussions in Rome will promote it.”
The withdrawal of Israeli forces from southern Lebanon remains a primary demand from Iran in broader regional negotiations. However, Israel maintains it will not fully withdraw its forces from the border region until Hezbollah disarms, a condition the militant group has rejected.
READ: Trump Calls Middle East Agreement ‘Test Failed By Sleazebags’ As US Escalates Strikes
Please make a small donation to the Tampa Free Press to help sustain independent journalism. Your contribution enables us to continue delivering high-quality, local, and national news coverage.
Sign up: Subscribe to our free newsletter for a curated selection of top stories delivered straight to your inbox.
