President Donald Trump scrapped his 20% fee on cargo crossing the Strait of Hormuz on Tuesday, one day after unveiling it, while keeping a full blockade on Iranian shipping.
Key Points:
- Trump replaced the 20% Hormuz transit fee with promised trade and investment deals from Gulf states.
- The US blockade on ships tied to Iranian ports took effect at 4 p.m. ET on Tuesday.
- Brent crude settled more than 9% higher and Bitcoin slid toward $62,000 as rate-hike bets climbed.
Trump Hormuz Fee Reversal
The president reversed course in a social media post, saying talks with Middle East leaders persuaded him to swap the charge for trade and investment deals that Gulf states will make in the United States.
He had unveiled the levy only a day earlier, declaring America the guardian of the strait and demanding 20% of the value of all cargo moving through it. The blockade now applies solely to ships heading to or from Iranian ports, or vessels carrying Iranian cargo.
US Central Command said enforcement would begin at 4 p.m. ET on Tuesday, hours after American forces completed a third consecutive night of strikes on Iran. State media reported explosions in Bushehr, Bandar Abbas, Mahshahr and Abadan.
Iran answered fast.
Iranian forces attacked US bases in Bahrain, Jordan and Kuwait, and struck three tankers that tried to cross the waterway. Foreign Minister Abbas Araghchi wrote on X that whoever provides safe passage through the strait deserves compensation, though he called the 20% figure "of course too much."
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Bitcoin And Oil React
Bitcoin (BTC) slipped toward $62,000 on Tuesday after sellers rejected the coin above $64,000 a day earlier, leaving it pinned near the bottom of its July range. Brent crude settled more than 9% higher on Monday at $83.30 a barrel, and Treasury yields rose alongside the dollar.
Traders lifted the odds of a July Federal Reserve rate hike to roughly 40%, up from about 35%.
Container line Hapag-Lloyd warned that charging tolls for passage through international waters is "fundamentally wrong," no matter which country collects them.
Saeed Al-Marri, chief executive of Ethra Invest, argued the pullback reflected leveraged longs getting wiped out rather than a broad exit, since long liquidations outpaced shorts six to one on Monday.
The strait carried about one-fifth of the world's oil and gas before the conflict and has now been effectively shut for 136 days.
An interim deal signed on Jun. 17 briefly calmed the standoff, let gasoline prices ease and helped Bitcoin climb back from late-June lows near $58,000. That truce collapsed last week after attacks on commercial vessels resumed, and the peace trade has been unwinding since.
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