President Donald Trump has reversed his threat to impose a 20% fee on all cargo shipping through the Strait of Hormuz, announcing the toll would be replaced by trade and investment deals with Gulf states. This decision comes just hours before the United States is set to resume a naval blockade of Iranian ports.

The move follows a surge in tensions and renewed strikes between the US and Iran, which have led to a sharp increase in oil prices and a near standstill in tanker traffic through the strategically vital waterway. The US had previously stated it carried out a third night of attacks aimed at degrading Iran's capacity to disrupt shipping in the region.

Earlier this week, Trump declared the US the "guardian" of the Strait of Hormuz and vowed to impose the 20% charge to fund its protection. He also indicated the US would reimpose its naval blockade on Iran to further pressure its economy. US Central Command confirmed the blockade was scheduled to begin Tuesday afternoon.

However, in a statement on Truth Social, Trump explained his change of heart, stating, "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." He added that these investments would be "MASSIVE but, at the same time, extraordinarily good for them, and their future," though he provided no further specifics.

Speaking later after meetings in Washington, Trump reiterated his dislike for the fee concept, noting it was "not fair that we're protecting this Strait for the entire world." He indicated that calls from Gulf leaders had influenced his decision to abandon the fee plan.

Shipping data indicates a significant slowdown in traffic through the Strait of Hormuz, reaching a two-month low. Concurrently, the benchmark Brent Crude oil price has seen a substantial rise. The waterway, through which a significant portion of global oil and liquefied natural gas previously flowed, has been severely impacted by ongoing military actions.

Iran has accused the US of interfering with its management of the Strait, while the US asserts its role in ensuring freedom of navigation. The escalating situation underscores the Strait's critical role in global energy markets and international trade.

In a related development, Israel's Prime Minister Benjamin Netanyahu issued a warning that his country's retaliation against Iran would be "much more powerful," indicating a broader regional escalation may be unfolding.