Crude oil held above $78 a barrel on Tuesday after President Donald Trump dropped a plan to charge a 20% fee on cargo passing through the Strait of Hormuz. Prices had risen more than 4% earlier in the session, Trading Economics reported, on top of a 9.4% jump the day before.
Trump announced the reversal on Truth Social. “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,” he wrote. He gave no details of any commitments from Gulf governments. He said only that the investments would be “MASSIVE.”
The fee lived for about a day. On July 13, Trump told Fox News the United States might take control of the strait, which in peacetime handles about one-fifth of the world’s energy transit. Later that day he posted that the United States was “THE GUARDIAN OF THE HORMUZ STRAIT” and floated the charge.
Strikes continue across southern Iran
Dropping the fee did not slow the fighting. Explosions rocked parts of Iran through July 14 as US forces hit targets inside the country and Tehran fired missiles around the Persian Gulf. Iranian state media said five blasts were heard near Bandar Abbas, the port city by the strait. Bushehr, home to Iran’s only nuclear power plant, also came under attack, and explosions were reported on the islands of Kish, Qeshm and Abu Musa.
Jordan and Bahrain said they intercepted barrages of Iranian ballistic missiles. The United Arab Emirates reported attacks on vessels in the strait that killed one crew member and wounded at least eight. Iran’s Revolutionary Guard claimed strikes on two oil tankers crossing Hormuz without active tracking signals, and the UAE’s ADNOC said two vessels were hit.
US Central Command said a naval blockade of ships heading to or from Iranian ports would be reinstated from 4 p.m. Eastern Time on July 14. “The U.S. military continues to support traffic flow through regional waters for all vessels not violating the blockade,” CENTCOM said.
An accord coming apart
The strikes are the latest sign that an accord signed last month, which set conditions for peace talks, is unraveling. Over the weekend Trump told Congress the United States was at war with Iran again. That starts a 60-day period in which he can order strikes without formal approval from lawmakers. Last week he said the Memorandum of Understanding was void in his mind, though negotiators could keep talking if they saw progress.
He still left the door open. “Yeah, I think a deal is possible. Sure, I do,” Trump told reporters in the Oval Office on July 13. “We had a deal with them two days ago and then they said ‘Oh we can’t make that deal. We have to negotiate it further.’”
Tehran’s answers were blunt. The Revolutionary Guard said just before Trump’s announcement that the only way to restore regular shipping was to end US military intervention in the waterway. Iran’s top joint military command said Washington had no role in deciding the strait’s future and warned that countries cooperating with the US “bear full responsibility for all insecurity and the escalation of the war in the region.” Foreign Minister Abbas Araqchi said “Iran has always been the GUARDIAN of the Strait and will remain so FOREVER.”
Araqchi met Omani Foreign Minister Sayyid Badr Albusaidi over the weekend to discuss safe navigation through the strait, according to Tehran. No US officials took part. RFE/RL learned from diplomatic sources that Omani mediators gave the Iranian delegation proposals on toll-free navigation through Omani waters in the southern part of the strait. Iran left saying it would return once it had a unified position. Shortly afterward, its national security apparatus fired on a commercial vessel and announced the waterway closed.
Iran’s new Supreme Leader, Mojtaba Khamenei, vowed revenge for the killing of his father and predecessor, Ali Khamenei, who died in US and Israeli air strikes on February 28 and was buried on July 9 in Mashhad. Retaliation, he said, “must inevitably be carried out.” Hours earlier, Trump had warned that any assassination attempt against him would bring overwhelming US military retaliation.
Sources
- Trump Scraps Hormuz Toll Plan as U.S.-Iran Conflict Deepens | OilPrice.com
- Oil Eases After Trump Drops Hormuz Transit Fee
