US president Donald Trump has said he will drop his demand for a 20 per cent fee on cargo passing through the Strait of Hormuz, as the US and Iran fight for control of the critical waterway.
Trump said on his Truth Social platform on Tuesday that instead of a fee, which he had expected Gulf allies to pay, the countries would invest in the US.
“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 wrote.
Late on Tuesday night, Trump said US representatives held talks with Iran.
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Trump made the comments in an interview aired on Fox News.
The president’s U-turn came hours in advance of the scheduled reimposition of the US military blockade against ships transiting Iranian ports and coastal areas.
Explosions were heard in several parts of Iran on Tuesday evening. The governor’s office of Iran’s Qeshm Island, on the Strait of Hormuz, said it was hit by a US projectile, Iranian state media reported.
In the early evening, Kuwait said its armed forces were engaging with “hostile” aerial targets, and the state news agency said sirens had sounded in the country.
[ Why has the Iran-US ceasefire memorandum frayed?Opens in new window ]
Oil prices rose about 2 per cent to a one-month high on Tuesday after the US reimposed the naval blockade on Iran and as the renewed attacks between Washington and Tehran heightened concerns over energy flows.
Trump had on Monday demanded the 20 per cent fee from allies including Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Kuwait, saying the US was entitled to levy the charge for serving as the “guardian” of the strait.
In the Oval Office on Tuesday, he said that he reversed course on the charge following calls from Gulf leaders: “They said: ‘We’d love to do it a different way. We’d love to invest in the United States with billions and billions of dollars’.”
There was no immediate confirmation of any investment pledges from Gulf states. Trump did not provide further details of which countries he had spoken to.
Hostilities between the US and Iran have escalated over the past week as the two move ever closer to a return to full-blown war. The Pentagon has launched six rounds of strikes against Iran, hitting hundreds of targets, with Trump promising a seventh on Tuesday night.
He said that he did not regret lifting the naval blockade. “I gave them a chance. I wanted to give them a chance at making a deal,” he said.
“They shot first. And that was a big mistake that they shot first because we have been knocking the hell out of them,” he added.
In the past week, Iran has attacked commercial ships attempting to transit the strait and launched retaliatory strikes against US targets throughout the Gulf.
The US and Israel struck Iran on February 28th, and Iran attacked Israel and Gulf states that host US bases in a war that also reignited conflict between Israel and Hizbullah militants in Lebanon. It killed thousands and displaced millions, the vast majority in Iran and Lebanon.
US Central Command, which oversees American military operations in the Middle East, has said its strikes are intended to “degrade” Iran’s ability to “attack innocent civilians and commercial shipping in the Strait of Hormuz”.
Lebanon and Israel resumed talks on Tuesday in Rome, with Beirut seeking progress towards securing an Israeli withdrawal from south Lebanon under a US-brokered deal.
Shipping through the strait has remained depressed since Washington and Tehran broke their ceasefire deal with a series of retaliatory strikes last week.
At the time of Trump’s announcement, three tankers were sailing into the Gulf, including one sanctioned ship, but none were sailing out.
No large vessels with their GPS signal turned on have exited the waterway using the route near the Oman coast on Monday or Tuesday. – Copyright The Financial Times Limited 2026/Reuters
