Jul 14, 2026
President Trump walked back his plan for the U.S. to “become guardians” of the Strait of Hormuz on Tuesday — a strategy that he previously said would have imposed a 20% toll on all cargo shipped for “providing safety and security to this very volatile section of the world.”
“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 wrote on Truth Social on Tuesday. “Those investments will be massive but, at the same time, extraordinarily good for them, and their future.”
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Trump didn’t elaborate on how much money such investments would include. He also claimed that the “Strait of Hormuz is open to all ship traffic except for Iran — and that is because of their lying, violent, malicious leadership.”
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The U.S. military announced a naval blockade against Iran beginning July 14 at 4 p.m. ET, while
The BBC reports that the ongoing hostilities in Iran and strikes from the U.S. have resulted in a reduced number of ships passing through the Strait.
The conflict in Iran shot the price of crude oil up to more than $86 as of Tuesday morning, its highest price in a month.
Trump’s walkback of his 20% toll, meanwhile, marks a reversal on a strategy that Harold York, nonresident fellow in energy and global oil in the Center for Energy Studies at the Baker Institute, told Moneywise would have represented “an unprecedented structural levy on global energy trade.”
How a 20% toll impacts the price at the pumps
American drivers may have just dodged a major price hike at the pumps with President Trump’s retreat from his 20% toll idea.
The exact impact of such a toll, York noted, would fluctuate based on the ship and the country paying it, among other factors.
For Very Large Crude Carriers (VLCC) carrying up to 2 million barrels of crude oil, he said a 20% toll could have amounted to a toll of anywhere between $26 million to $34 million per carrier — 17 times more than Iran’s reported $2 million tolls on some carriers in the Strait.
Kristian Coates Ulrichsen, a co-director of the Baker Institute’s Middle East Energy Roundtable, agreed, estimating a similar price jump and told Moneywise that “any such increase in the cost of transporting oil through the Strait would certainly feed into prices at the pump.”
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York estimated that a $15 per barrel toll increase could have led to a 30 to 35 cent per gallon hike at the pumps “even if little Gulf oil is physically imported into the United States,” since oil is priced in the global market.
He added that every $10 increase in the price of a barrel of crude oil historically leads, roughly, to a 20 to 30 cent gas price increase per gallon in the U.S. — with various external factors impacting the exact cost difference.
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Strait talk: a toll would violate international maritime law
In addition to costing American drivers more when they fill up, Trump’s Strait toll would have also been just plain illegal.
Officials in Trump’s own administration have noted the illegality of charging other countries a toll on a waterway and Rockford Weitz, professor of practice in maritime studies at The Fletcher School at Tufts University, agreed.
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“Any tolls charged on transits through the Strait of Hormuz would be a clear violation of freedom of navigation and international maritime law,” he told Moneywise, noting that the Strait “is an international waterway under the Law of the Sea so commercial ships have transit passage rights.”
He added that “the U.S. has championed freedom of navigation since our founding,” so Trump’s tolls would signify “a major policy shift.”
York said that multiple countries would likely object to such tolls, while John Calabrese, a Middle East Institute senior fellow, told Moneywise that “if the United States cannot currently guarantee safe passage through Hormuz, on what basis can it sell that guarantee?”
Last week, Trump declared that the ceasefire with Iran was over, reportedly telling Congress that they’d resumed “military action” against the nation.
Iran, meanwhile, mocked the idea of Trump’s 20% toll idea, with the country’s foreign minister quipping “20% is of course too much. We will be fair.”
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Mike Crisolago is a Sr. Staff Reporter at Moneywise with nearly 20 years of experience working as a journalist, editor, content strategist and podcast host. He specializes in personal finance writing related to the 50-plus demographic and retirement, as well as politics and lifestyle content.
