Trump backs down from Hormuz transit fee

In a dramatic policy reversal, US President Donald Trump abandoned plans to impose a 20% transit fee on vessels using the Strait of Hormuz as the renewed confrontation between the United States and Iran intensified sharply on Tuesday with fresh military strikes, missile attacks across the Gulf.

The day unfolded amid widening regional instability as US forces launched a third consecutive night of attacks on targets inside Iran. Tehran responded with missile and drone strikes against American military assets in neighbouring countries, and commercial shipping came under renewed attack in the Hormuz.

Hours before a US naval blockade of Iranian ports was due to take effect, Trump announced that he had withdrawn his proposal to charge all vessels a 20% fee for transiting the Hormuz. Instead, he said he would pursue trade and investment arrangements with Gulf allies, following talks with regional leaders.

"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 said on his Truth Social platform.

Later, during a White House meeting with Iraqi Prime Minister Ali al-Zaidi, Trump said no country should be allowed to charge ships for passing through international straits, adding that Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Kuwait had expressed willingness to increase investments in the US.

He did not specify any financial commitments but maintained that the Strait of Hormuz would remain open to international shipping while a "full blockade" would apply only to vessels travelling to or from Iranian ports or carrying Iranian cargo.

The policy shift came after widespread criticism of the proposed transit levy from the international shipping industry and the United Nations' shipping agency, which said there was no legal basis for imposing mandatory tolls on international navigation through the strait.

Despite the reversal on transit charges, military operations continued to escalate. The US military carried out its third straight night of strikes against targets across Iran, saying operations were intended to degrade Tehran's ability to threaten commercial shipping.

US Central Command said the attacks targeted facilities in Bushehr and Bandar Abbas as well as other locations linked to Iran's military capabilities. Iranian media reported explosions on Qeshm Island after a US projectile strike, while another projectile landed near a water and electricity facility on Kish Island.

Additional explosions were reported in Khuzestan province, including Omidiyeh, where provincial authorities said four people were injured. Residents also reported blasts around Bandar Abbas, Abu Musa Island and other locations along Iran's southern coast.

Iran responded by expanding missile and drone attacks against US interests across the region. The Iranian military statements said drones struck American military facilities in Kuwait, including communication systems, fuel depots, ammunition warehouses and Patriot missile batteries.

The Islamic Revolutionary Guard Corps (IRGC) said ballistic missiles targeted a US military base in Jordan, while Iranian state media also reported that the country's navy targeted a hostile US vessel with cruise missiles.

Jordan said its armed forces intercepted and destroyed four Iranian missiles that entered its airspace, while Bahrain announced its air defence systems had successfully intercepted Iranian aerial attacks over the kingdom. Sirens also sounded in Kuwait, where authorities said armed forces engaged hostile aerial targets.

The confrontation spread further into international shipping lanes. The United Arab Emirates said two Emirati oil tankers, Mombasa and Al Bahiyah, were struck by Iranian cruise missiles while transiting the southern shipping lane of the Strait of Hormuz within Omani territorial waters.

According to the UAE Ministry of Defence, one Indian crew member was killed and eight others were wounded, including four who suffered serious injuries. Fires broke out aboard both vessels before being brought under control.

The IRGC acknowledged attacking two supertankers they described as offending vessels, claiming they had ignored repeated warnings, switched off navigation systems and attempted to travel through a sea mined route.

Separately, Norwegian shipping company Stolt Tankers reported that its vessel Stolt Magnesium suffered an explosion caused by an unidentified external device while sailing off the Omani coast, triggering a fire in the engine room. All crew members were reported safe.

Britain's Maritime Trade Operations agency also confirmed that a tanker had been struck by an unidentified projectile northeast of Qalhat, Oman. India summoned Iran's senior diplomat in New Delhi after one Indian sailor was killed and several others injured aboard the two Emirati vessels.

Iran, meanwhile, moved to reinforce its position over the strategic waterway politically as well as militarily. The head of parliament's National Security and Foreign Policy Committee announced that lawmakers had formally introduced legislation dealing with the future management of the Strait of Hormuz.

Committee chairman Ebrahim Azizi said the proposed law represented the first step in protecting Iran's "red lines regarding management of the waterway". Iranian military spokesman Mohammad Akraminia declared that respecting Iran's rights remained the only path to restoring normal navigation.

Tehran also complained to the United Nations, accusing Washington of repeatedly violating the Islamabad Memorandum of Understanding (MoU) signed last month, which had been intended to provide a framework for ending the war.

The renewed hostilities further weakened hopes that the June MoU could still produce a permanent settlement. Iranian Foreign Ministry spokesman Esmaeil Baghaei said the agreement was now "in crisis", although he confirmed talks with mediators from Qatar, Pakistan and Oman were continuing.

The rapidly deteriorating security environment sent energy markets higher. Brent crude climbed to its highest level in four weeks after surging sharply a day earlier, while US benchmark crude also recorded significant gains amid renewed concerns over supplies through the Strait of Hormuz.