Trump scraps plan to charge fees in Strait of Hormuz, attacks intensify

US President Donald Trump backtracked on plans to charge ships for using the Strait of Hormuz, saying Gulf countries would instead invest in the United States.

Another wave of US strikes on Iran and Iranian attacks on shipping and American allies left an interim peace deal in tatters.

That agreement was supposed to reopen a waterway that is key to world energy supplies and give negotiators time to hammer out a permanent end to the war. Instead, fighting has once again engulfed the region, threatened the global economy and brought warnings to commercial airlines.

A fifth of all traded crude oil and natural gas passed through the Strait before the war, when it was open to all without tolls. When the US and Israel attacked Iran on February 28, it effectively shut the passage by attacking and threatening ships — a tactic that proved its greatest strategic advantage. That sent the price of oil, fertiliser, and other goods soaring at a time when world leaders were already struggling to address rising costs.

Iran has more recently attacked ships moving through the Strait on a route overseen by the US military that is outside Tehran’s control, setting off tit-for-tat strikes. The US has threatened to reopen the Strait by force — but experts say that would require a much bigger armada, if not tens of thousands of ground troops.

Trump says he's replacing the fees with Gulf investments

On Monday (local time), Trump said the US would reimpose a blockade on Iranian ports and begin charging ships fees equivalent to 20% of their cargo to defray the costs of securing the Strait. He backed off on the fees a day later, while the blockade is set to come back into force in the coming hours.

Trump said he was called by “kings and emirs” and other leaders who suggested an alternate arrangement.

“They said we’d love to do it a different way. We’d love to invest in the United States with billions and billions of dollars,” Trump told reporters in the Oval Office on Tuesday (local time).

Trump said he preferred that arrangement to charging tolls “because I don’t think anybody should be able to charge a fee for the Strait.”

It was unclear if the investment deals would be new commitments relative to what Trump announced after a visit last year to the Middle East.

Strikes and counterstrikes resume across the Mideast

The US military’s Central Command said it struck several areas in Iran, targeting “coastal defence systems, missile and drone sites and maritime capabilities”. Iran acknowledged the strikes but provided no immediate casualty or damage assessments.

“These strikes will continue imposing a heavy cost on Iranian forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz,” the US military said.

Iran responded with attacks targeting Kuwait, Jordan and three tankers that travelled through the Strait. In Bahrain, which hosts the US Navy’s 5th Fleet, air raid sirens sounded on four occasions Tuesday as authorities told people to seek shelter.

Two of the targeted ships were associated with the United Arab Emirates and were set ablaze for a time. The International Maritime Organisation said the attack on the tankers Mombasa and Al Bahiyah killed two mariners and wounded 14 others. The UAE threatened to retaliate.

Dutch shipping firm Stolt Tankers said that one of its ships came under attack. The attack on the Stolt Magnesium off Oman sparked a fire in the engine room, but the company said all the mariners were safe.

Iran’s paramilitary Revolutionary Guard said the Mombasa and Al Bahiyah “ignored repeated warnings”. Iran has targeted ships that use a route through the Strait that passes near Oman outside of its territorial waters.

Hours after the US said it ended its campaign of strikes, the Iranian city of Bushehr on the Persian Gulf was hit in at least four locations, the state-run IRNA news agency reported. The attacks again raised the possibility that Gulf Arab states were retaliating against Iran without discussing it in public.

The European Union Aviation Safety Agency warned airlines against operating in the airspace of Bahrain, Kuwait, Qatar and the United Arab Emirates, as well as over the Gulf of Oman.

The interim peace deal is in peril

Exchanges of fire in recent days had already cast doubt on the interim peace deal — now almost halfway through the 60-day period in which negotiators were supposed to agree to a final accord, which also was meant to address Iran’s disputed nuclear program and other issues.

Washington lifted a blockade it imposed in mid-April as part of the deal. The US military said it will resume it at midnight Wednesday (local time) in Dubai.

Trump's plan to charge fees would have been a change to longstanding US policy and a departure from recent US promises that the Strait would remain open to all without tolls — recently offered by US Secretary of State Marco Rubio on a trip to the region.

Under the interim deal, Iran agreed that passage through the Strait would remain free of charge for 60 days — but the agreement left open what would happen after. Iran asserts it has the right to manage traffic through the Strait and potentially charge fees. The US has disputed that.

The price for a barrel of Brent crude oil, the international standard, briefly topped US$87 early Tuesday, still well below the nearly US$120 reached at the height of the war. The price dipped to US$78 in the aftermath of Trump’s announcement that he had changed course.

Mediators are trying to prevent a return to full-scale war

Regional mediators are still trying to get the United States and Iran back to the negotiating table, according to two regional officials.

The officials, speaking on condition of anonymity to discuss the delicate diplomatic process, said Pakistan-led mediation was working around the clock to reactivate the ceasefire.

Meanwhile, Lebanese and Israeli delegations were expected to meet in Rome on Tuesday to continue US-mediated negotiations. Shortly after the US and Israel launched the war on February 28, the Lebanese militant group Hezbollah joined the conflict in support of its ally, Iran, and began attacking Israel. Israel responded with a ground invasion of Lebanon.

Last month, Lebanon and Israel announced a “framework agreement” outlining the withdrawal of Israeli forces from southern Lebanon in exchange for the disarmament of Hezbollah. Implementation has stalled.

Before the fighting around the Strait intensified, Israel’s war against Hezbollah in Lebanon repeatedly threatened to derail the interim deal. A truce now exists in Lebanon, but it remains unclear whether it will hold if the US and Iran return to full-scale war.