Donald Trump abandoned his 20 per cent fee on Strait of Hormuz cargo on Tuesday, 26 hours after announcing it, while a US naval blockade of Iranian ports came into force at 6am Wednesday, Australian eastern time.
"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," the US President wrote on Truth Social. To reporters, he was plainer about what happened: "So I put it out yesterday. I thought it was good ... I was called by different people, different countries, kings and emirs ... they said we'd love to do it a different way."
The fee had drawn a rebuke from the International Maritime Organization before it was a day old. "Countries do not have the right to introduce tolls or payments or charges on these straits," the IMO's secretary-general Arsenio Dominguez said.
The blockade that survived the retreat is narrower than first described. Its stated terms apply to vessels moving to or from Iranian ports or carrying Iranian cargo. Transit to and from other destinations is not to be impeded, and humanitarian shipments are permitted subject to inspection. More than 20 US warships are enforcing it, and an earlier version that ran from April to June redirected more than 140 vessels, according to US officials cited by NPR and CBS.
The strikes have not paused for any of it. US aircraft hit Iranian coastal targets again into Tuesday, and Iranian missiles struck two more tankers in the strait. The UAE defence ministry said one mariner, an Indian national, was killed and eight people were wounded aboard the tankers Mombasa B and Al Bahiyah. An AFP tally published by SBS counted at least 25 people killed since hostilities resumed on July 8.
The war also widened on a second front. Yemen's Houthis fired ballistic missiles and drones at Abha airport in southern Saudi Arabia on Monday, hours after strikes on Sanaa's airport that Yemen's government said were aimed at stopping an Iranian aircraft from landing. It was the first Houthi attack on Saudi territory since the 2022 ceasefire.
Tehran has not moved. Foreign Minister Abbas Araghchi's answer to the original fee was blunt: "20% is of course too much. We will be fair." His deputy said the June agreement with Washington had been destroyed by the American strikes, and Iran has rejected a resumption of UN nuclear inspections. The Revolutionary Guard's position is unchanged: the strait is "closed until further notice and until the end of American interventions in this region".
Traffic tells its own story. The US Department of Energy counted 57 transits between Friday and Sunday, less than half the usual weekly rate, against a pre-crisis average of about 130 vessels a day. Brent crude touched US$87 a barrel on Tuesday, its first visit since June, before settling at US$84.73, up 1.72 per cent. Insurers now put war-risk premiums for the strait at several per cent of a vessel's value per transit.
Canberra, which has kept its travel advice for the region at do not travel, had made no statement on the fee retreat by Wednesday morning.
Where that leaves the strait is unchanged in form and worse in fact. Iran says it is closed. Washington says it is open to everyone but Iran. Asked whether a deal was still possible, Trump said: "Yeah, I think a deal is possible. Sure, I do."
