President Donald Trump abruptly abandoned his plan to impose a 20 percent levy on cargo transiting the Strait of Hormuz, announcing on Tuesday that the fee would be replaced by trade and investment agreements with Gulf states. The reversal, disclosed on his Truth Social platform, came less than 24 hours after he declared the United States the “guardian” of the waterway and said Washington would charge for security. The blockade on vessels entering or leaving Iranian ports, however, remains in force, with the US military confirming it would resume at 2000 GMT Tuesday. Oil prices, which had spiked on the initial toll announcement, eased slightly after the post but remained elevated amid the broader military escalation.

Viewed from Washington, the decision was framed as a diplomatic success. Trump told reporters that “kings, emirs, and all of the people that we all know and we all love” had called to propose investing “billions and billions of dollars” in the United States instead of paying a transit fee. He added that he did not believe anyone should charge for passage through an international strait, a position that aligned with earlier statements by his own secretary of state and vice president. The White House did not specify which Gulf countries had made commitments or whether the investments represented new pledges beyond those already announced. Gulf officials, for their part, have not publicly detailed any fresh agreements, though regional media reported that leaders from Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, and Kuwait had contacted the president.

Tehran’s response was immediate and defiant. Iran’s military command insisted it would not permit the United States to “interfere” in the strait, and the deputy foreign minister said the US blockade effectively dissolved the June ceasefire memorandum. Iranian state media reported that the country’s Revolutionary Guard had struck two Emirati-linked tankers and launched ballistic missiles at a US base in Jordan and at Bahrain. The UAE confirmed one crew member was killed and eight wounded. The renewed exchanges of fire—US Central Command said it had struck coastal defence systems and missile sites across Iran for a third consecutive night—have all but buried the interim truce that had briefly reopened the strait to commercial traffic.

The episode drew sharp criticism from international maritime bodies and major shipping firms. The International Maritime Organization reiterated that no legal basis exists for mandatory tolls on straits used for international navigation. German container line Hapag-Lloyd called the proposed fee “fundamentally wrong,” while the UN high commissioner for human rights warned that disruptions to the flow of food and medicines through the strait would have severe humanitarian consequences. The Strait of Hormuz, through which roughly one-fifth of global oil and liquefied natural gas passes, has been a central battleground since the US and Israel attacked Iran in February. A June memorandum of understanding had outlined a path to a permanent ceasefire, but conflicting interpretations of its terms—particularly over control of the waterway—prevented its implementation.

With the blockade reimposed and both sides continuing military operations, the dossier remains in a volatile state. No new diplomatic track has been announced, and the US Congress has been formally notified of the resumption of hostilities. The immediate focus is on whether the blockade will be enforced without further escalation and whether the promised Gulf investments will materialise in a form that satisfies Washington’s demand for compensation.