Trump backs away from plans to charge fees in the Strait of Hormuz as attacks intensify

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DUBAI, United Arab Emirates -- U.S. President Donald Trump on Tuesday announced a reversal of plans to charge a 20 per cent toll on cargo going through the Strait of Hormuz, saying that Middle Eastern countries will instead make investment and trade deals with the U.S.

“Based on highly productive conversations with Middle East leadership, I have decided to replace the 20 per cent United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States,” Trump said on social media.

The president said the investments “will be MASSIVE,” though it’s unclear if these would be new commitments relative to what Trump announced after a visit last year to the Middle East.

The U.S. had launched strikes earlier in the day, and Iran retaliated by attacking American allies in the region.

The latest exchange of fire leaves in tatters an interim deal meant to pause the fighting, 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. Unless a diplomatic solution is found quickly, it could intensify into all-out war.

The focus of the conflict now is the strait, through which a fifth of all traded crude oil and natural gas passed in peacetime. Iran effectively shut the passage during the war by attacking and threatening ships -- a tactic that proved its greatest strategic advantage. It sent the price of oil, fertilizer and other goods soaring at a time when world leaders were already struggling to address rising costs.

The interim deal was supposed to reopen the waterway, but Iran has attacked ships moving through the strait on a route overseen by the U.S. military that is outside Tehran’s control.

The U.S. has now threatened to reopen the strait by force -- but experts say that will require a much bigger armada if not tens of thousands of American ground troops. It’s possible Trump will back down, as he has previously.

Attacks resume across the Mideast

The U.S. 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 U.S. military said.

Iran responded with attacks targeting Bahrain, Jordan and three tankers that travelled through the strait.

Two of the ships were associated with the United Arab Emirates and were set ablaze for a time. The Emirati Defence Ministry said the attack on the tankers Mombasa and Al Bahiyah killed one mariner and wounded eight others. The Emirates 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 U.S. 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. It again raised the possibility that Gulf Arab states were attacking Iran in retaliation.

Bahrain, home to the U.S. Navy’s 5th Fleet, sounded its missile alert sirens three times early Tuesday. Jordan’s military said it intercepted four missiles from Iran. Jordan hosts U.S. forces and has come under attack by Tehran in recent days.

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.

It said in a bulletin that “unpredictable military developments, combined with the possible use of missiles, drones, combat aircraft and air-defence systems, create a high risk to civil flights.”

Interim 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.

But Trump’s vow to impose a blockade further imperils it. Washington lifted a blockade it imposed in mid-April as part of the deal. The U.S. military said it will resume it at midnight Wednesday in Dubai.

“We are reinstating the THE IRANIAN BLOCKADE,” Trump said on social media Monday. He had also said the U.S. would charge fees on other ships equal to 20 per cent of the value of their cargo to help cover “any and all costs necessary to do the job of providing safety and security.”

That would have been a change to longstanding U.S. policy and a departure from recent U.S. promises that the strait would remain open to all without tolls -- recently offered by U.S. 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 U.S. has disputed that.

Any attempt by the U.S. or Iran to charge fees would violate global norms on freedom of navigation and raise tensions, likely causing further economic disruption far beyond the region.

The price of Brent crude oil, the international standard, rose to a one-month high of over US$87 in trading Tuesday, still well below the nearly $120 reached at the height of the war but threatening to raise costs everywhere.

Mediators working 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 U.S.-mediated negotiations. Shortly after the U.S. and Israel launched the war on Feb. 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 U.S. and Iran return to full-scale war.

Jon Gambrell, The Associated Press

Associated Press writer Samy Magdy in Cairo contributed to this report.