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US President Donald Trump has introduced a new dimension to the escalating conflict with Iran by proposing a 20 per cent charge on all cargo moving through the Strait of Hormuz, one of the world’s most critical energy routes.
Trump said the United States would become
the “guardian” of the strategic waterway and would be reimbursed for the cost of providing security to commercial vessels passing through the strait.
The announcement came as Washington moved to reinstate a blockade on Iranian ports near Hormuz, deepening tensions between the two countries and raising fresh concerns over the stability of global energy supplies.
The move has already rattled oil markets, with crude prices
surging nearly 10 per cent in the biggest one-day gain since 2020, as traders assessed the possibility of prolonged disruption in one of the world’s most important oil transit corridors.
Trump turns Hormuz into a new economic battleground
In a post on Truth Social, Trump said the US would be “THE GUARDIAN OF THE HORMUZ STRAIT” and would be compensated “at the rate of 20% on all cargo shipped” for the costs involved in securing the route.
“The process and formation will begin immediately,” Trump said, without providing details on how the proposed fee would be collected, who would pay it or how it would be enforced.
Trump had earlier suggested that the US should be paid for protecting the waterway, arguing that Washington had provided security for decades without receiving compensation.
“We’re going to keep the strait, and we’ll probably run it. We’ll become the guardian of the strait,” Trump said in an interview with Fox News.
The announcement came after fresh military exchanges between the US and Iran, with both sides escalating attacks and raising fears that a fragile ceasefire could collapse.
Why Strait of Hormuz matters to the world economy
The Strait of Hormuz is one of the most important energy chokepoints globally. Located between Iran and Oman, the narrow waterway connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.
Around one-fifth of the world’s oil consumption typically passes through the strait every day, making it a crucial route for crude exports from major Gulf producers, including Saudi Arabia, the United Arab Emirates, Kuwait and Iraq.
The route is also critical for liquefied natural gas (LNG) shipments, particularly from Qatar, one of the world’s largest LNG exporters.
Any disruption in Hormuz immediately affects global energy markets because alternative routes are limited and cannot fully replace the volume of oil transported through the waterway.
From free passage to a security fee
Trump’s proposal marks a major shift in the debate over control of international waterways.
For decades, global shipping has operated on the principle of freedom of navigation through strategic maritime routes. But Trump’s proposed 20 per cent charge introduces the idea that security protection for commercial shipping could come with a direct financial cost.
The International Maritime Organization (IMO), the United Nations agency responsible for global shipping standards, opposed the introduction of mandatory transit fees for international straits.
“We have always been consistent on our stance on fees – IMO stands firmly against charging fees for passage through straits used for international navigation,” the organisation said.
The agency added that there was “no legal basis” for introducing mandatory tolls simply for ships passing through a strait.
Shipping industry officials also questioned whether such a charge would improve safety conditions for vessels travelling through Hormuz.
Oil markets react to renewed Hormuz fears
The uncertainty around the waterway triggered a sharp rally in crude prices.
Brent crude futures jumped 9.62 per cent to settle at $83.32 a barrel, while US West Texas Intermediate crude rose 9.4 per cent to $78.14 a barrel.
The surge erased weeks of declines in oil prices as investors reassessed the possibility that shipping disruptions in Hormuz could continue for an extended period.
The market reaction reflects a broader concern: even if the strait remains technically open, higher security risks could increase the cost of transporting energy.
Oil traders are closely watching shipping activity, insurance costs and tanker movements, as companies may demand higher premiums to operate in a conflict zone.
Efforts to reduce Hormuz dependence
The latest crisis has renewed long-running efforts by Gulf countries to reduce their dependence on the Strait of Hormuz.
Saudi Arabia has expanded crude export capacity through pipelines connecting its eastern oil fields with Red Sea ports, allowing some shipments to bypass the strait.
The United Arab Emirates has also invested in alternative export routes and infrastructure outside Hormuz.
However, experts say these alternatives can only handle a portion of Gulf exports and cannot fully replace the strategic importance of the waterway.
Building new infrastructure would require significant investment and years of development, while pipelines and terminals would remain vulnerable to geopolitical risks.
Why India is watching Trump’s Hormuz move closely
For India, any prolonged disruption in the Strait of Hormuz carries significant economic risks.
India imports more than 80 per cent of its crude oil requirements, and Gulf countries remain among its most important energy suppliers because of their geographical proximity and established trade networks.
A sustained increase in oil prices could widen India’s import bill, put pressure on the rupee and complicate the inflation outlook.
Higher crude prices could also create challenges for the Reserve Bank of India as it balances economic growth with inflation management.
While India has diversified its sources of crude imports in recent years, the Gulf region continues to play a central role in meeting the country’s energy needs.
A new cost for global energy trade?
Trump’s Hormuz proposal has transformed an old geopolitical flashpoint into a debate over the economics of global energy security.
The key question for markets is whether the proposed fee becomes a temporary wartime measure or sets a broader precedent for charging commercial vessels for security protection along strategic trade routes.
For now, uncertainty remains high. But with oil markets already reacting sharply, the Strait of Hormuz has once again emerged as a reminder that a narrow waterway can have a global economic impact.
