President Donald Trump on Tuesday announced that he will replace a 20% fee on commercial shipping moving through the Strait of Hormuz with "Trade and Investment Deals" that Gulf nations will be making in the United States.
Trump said the move came as the movement of oil and natural gas supplies has eased along the waterway, a vital, narrow commercial shipping point currently being contested by Washington and Tehran.
"Oil is flowing like never before, thanks to the awesome Power of the United States Military," Trump wrote on Truth Social. "The Strait of Hormuz is open to ALL Ship traffic except for Iran — and that is because of their lying, violent, malicious leadership, which is taking them down the path of TOTAL DESTRUCTION."
OIL PRICES FLUCTUATE AS TRUMP'S IRAN DEAL COULD FULLY REOPEN STRAIT OF HORMUZ
However, Trump said he would reinstate a blockade on Iran.
"We will therefore have a FULL Blockade, but only on Ships coming to and from Iranian ports, or carrying anything have to do with Iranian cargo," he added. "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's announcement comes amid Iran's push to assert control over the strait. Tehran has claimed sovereign authority over the territory, despite the strait historically being considered a free-to-use international waterway.
During Tuesday's meeting with Iraqi Prime Minister Ali al-Zaidi, Trump said he spoke with Gulf state leaders, who all said they would like to invest in the U.S. "at record amounts."
OIL PRICES PLUNGE TO LOWEST LEVELS SINCE EARLY MARCH AFTER TRUMP SIGNS IRAN DEAL
"And this way there's no fee," he told reporters in the Oval Office. "I don't like the concept of a fee, but at the same time, it's not fair that we're protecting this strait for the entire world, for China and everyone."
"I don't mind protecting it for anybody. But it's unfair that we're not in somehow compensated. And we've been doing this for many years," he added. "They're investing and they're getting a return on their money, and it's good, but they're going to be making massive investments into the United States and I like that much better."
Over the weekend, U.S. and Iranian forces exchanged missile and drone attacks as Tehran again claimed to have control over the strait.
On Monday, the U.S. launched strikes against Iranian military sites. By Tuesday, Trump said Iran had been "very much destabilized."
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"I think what we've done to Iran is we've taken away almost all of their military capability."
"I gave them a chance. I wanted to give them a chance at making a deal. You know, we had a deal two days ago. It was done. And then all of a sudden, they couldn't do it," he said. "They didn't like something about the deal. They couldn't do it. And they shot first. And that was a big mistake that they shot first because we have been knocking the hell out of them."