Trump Says US Will Be Reimbursed 20% Rate for Hormuz Traffic

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(Bloomberg) — President Donald Trump said the US would reinstate its blockade of Iranian ships transiting the Strait of Hormuz and demanded a 20% reimbursement on all other cargo shipped through the waterway.

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“The U.S.A. will be, from this point forward, known as “THE GUARDIAN OF THE HORMUZ STRAIT,” but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World,” Trump said Monday on social media.

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Trump said “the process and formation” of his plan “will begin immediately.” The White House did not immediately provide other details on Trump’s proposal, including how it would be administered or whether it had been communicated to US allies in the Gulf. 

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The comments intensify a spat between Tehran and Washington over whether the critical shipping corridor is open for traffic.

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Oil prices extended gains to session highs on Trump’s comments. Both benchmarks rose about 5% to session highs, with Brent touching $80 a barrel again.

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The Strait of Hormuz is a critical conduit for energy and other commodities, having provided passage for about a fifth of the world’s oil flows before the US and Israel began strikes on Iran in late February. Iran’s efforts to close the waterway during the war pushed up energy prices globally and created political blowback for Trump. 

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Iran choked off the Strait of Hormuz to maximize leverage during the war and an interim peace agreement between the two countries provided for toll-free commercial shipping during a 60-day negotiating window.

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Other countries and industries reliant on traffic through the narrow waterway have insisted it should be free to access, without tolls or other maritime service charges. Several US officials, including Secretary of State Marco Rubio, and Trump, previously said the strait should remain open for all.

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Trump, however, said earlier Monday that the US should be compensated for helping to keep traffic moving through the strait. Other countries “made all the money” previously, he alleged on Fox. Insisting on that could anger Gulf allies that export energy through Hormuz.

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“We guarded it for nothing, and now we’re going to guard it, and we’re going to get paid for guarding it — a lot of money.” Trump said. “But we just want to be reimbursed for doing all of this, for putting our people in danger.”

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Under international law, ships generally are guaranteed a right of transit passage through waterbodies used for international navigation, and coastal states aren’t allowed to charge vessels for the opportunity. There can, however, be charges for some “specific services” rendered to individual ships.

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—With assistance from Devika Krishna Kumar.

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(Updates with additional context throughout)

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