US President Donald Trump has abandoned a proposal to impose a 20% fee on ships passing through the Strait of Hormuz, instead opting to pursue trade and investment agreements with Gulf states.

The decision comes after days of escalating tensions with Iran, which had previously closed the strategic waterway and threatened to disrupt global oil supplies.Trump's reversal follows a last-minute change of heart, with the strait remaining open to all shipping except Iranian vessels.The move replaces the controversial fee plan, which could have generated over $344 million daily, with a focus on economic partnerships.Gulf leaders reportedly urged alternative arrangements, highlighting their willingness to invest billions in the US.However, the decision risks further destabilizing the already fragile ceasefire between Washington and Tehran.

Recent attacks on US military installations in Jordan and Bahrain, along with Iranian strikes on US assets, have raised concerns about the sustainability of peace talks.Oil markets reacted cautiously, with prices dipping after initial gains.

Analysts warn that the situation remains volatile, with the potential for renewed conflict threatening global energy security and inflationary pressures.