Submitted by Bill Fernie
14th July 2026
Update Today as Donald Trump changes his mind to remove threat of tolls.
The latest development is actually a rapid policy reversal.
The oil price remains around $84
Yesterday, President Trump announced that the United States would charge a 20% fee on the value of cargo carried by ships using the Strait of Hormuz. He argued that the U.S. Navy was effectively acting as the "guardian" of the waterway and that other countries should help pay for the cost of keeping it open.
However, today he announced that he is dropping the proposal. Instead of collecting a transit fee, he said the United States would pursue trade and investment agreements with Gulf states, which he believes will provide greater long-term economic benefits than charging ships for passage.
Why was the fee proposed?
Trump's argument was based on three points:
The U.S. military has borne much of the cost of protecting shipping in the Gulf.
Around a fifth of globally traded oil passes through the Strait of Hormuz, making it one of the world's most strategically important shipping lanes.
Countries importing that oil, particularly in Asia and Europe, benefit from the security provided by the U.S. Navy and therefore should contribute financially.
He described the charge as reimbursement rather than a tax.
Why has he changed his mind?
According to Reuters, after discussions with Gulf leaders, Trump concluded that investment and commercial agreements would deliver a better return than imposing a shipping fee. He has not announced specific deals yet, but said they would be worth more than the revenue that the proposed toll would have raised.
What happens now?
The important point is that the fee has been abandoned, but the U.S. naval operation has not.
Current policy is:
Ships trading with countries other than Iran will continue to be allowed through the Strait under U.S. protection.
The U.S. blockade remains focused on vessels linked to Iranian ports and cargoes.
The proposed 20% cargo charge will not be introduced.
Why this matters
For countries like the UK, which import oil and liquefied natural gas that passes through Hormuz, dropping the fee removes one potential extra cost that could have fed into fuel prices.
However, the biggest influence on oil prices is still the security situation itself. As long as the risk of attacks on shipping or military escalation remains, oil markets are likely to stay volatile, regardless of whether ships are charged an escort fee.
One aspect that may interest your Caithness readers is the historical para
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A proposal from Donald Trump to impose a 20% charge on the value of cargoes travelling through the Strait of Hormuz has raised one of the most important questions in modern international trade:
Who has the right to charge for the protection of the world's most important shipping routes?
Supporters would argue that if the United States is providing naval protection, putting ships and personnel at risk, then countries and companies benefiting from that protection should contribute towards the cost.
Critics, however, question whether a military power can effectively impose a toll on an international waterway.
The debate is not just about the Middle East. It could set a precedent for how global trade routes operate in the future.
What Is the Strait of Hormuz?
The Strait of Hormuz is a narrow stretch of water between Iran and Oman connecting the Persian Gulf with the Gulf of Oman and the wider Indian Ocean.
It is one of the world's most important energy routes.
A large proportion of the world's oil exports, together with significant volumes of liquefied natural gas, pass through this route every day.
Any threat to shipping immediately affects global energy markets because traders worry about whether supplies will continue reaching customers.
How Would a 20% Charge Work?
The basic idea appears simple:
A ship carrying valuable cargo through the Strait would pay a percentage of the cargo value in return for protection.
However, putting it into practice would be extremely complicated.
Consider an oil tanker carrying crude oil worth $100 million.
A 20% charge would amount to $20 million.
Questions immediately arise:
Who receives the payment?
Is it paid by the ship owner, the oil company or the country buying the oil?
How is the cargo value calculated?
What happens if a company refuses to pay?
Who has authority to enforce the charge?
This would be very different from normal shipping fees, such as harbour charges or navigation services.
A 20% charge would effectively operate more like a major tax on international trade.
Protection Service or International Toll?
This is where the biggest controversy lies.
There are examples around the world where governments charge for services connected with shipping.
Ports charge fees.
Canal operators charge vessels using waterways such as the Panama Canal and Suez Canal.
But these charges exist because there is an established legal framework and an agreed service.
The question with Hormuz is whether one country can impose a compulsory payment simply because it is providing military protection.
Supporters might argue:
"Security has a cost and those who benefit should contribute."
Opponents might respond:
"An international trade route should not become a pay-to-pass system controlled by one country."
This is why some critics have compared the idea to the kind of protection payments demanded throughout history by powerful groups controlling trade routes.
The supporters would strongly reject that comparison, arguing that a national navy providing security is entirely different from piracy.
The legal arguments would likely continue for years if such a system was introduced.
Who Would Really Pay?
This is perhaps the most important question for ordinary people.
The first people affected might be:
shipping companies;
oil traders;
energy companies;
commodity markets.
But costs rarely stop there.
A shipping company facing a much higher cost will usually try to recover that money.
The chain could look something like this:
Higher shipping charges → higher oil costs → higher fuel prices → higher transport costs → higher prices in shops
Ultimately, the bill is likely to reach:
Motorists
Petrol and diesel prices respond quickly to changes in crude oil prices.
Even small increases in the cost of oil can eventually affect forecourt prices.
Households using heating oil
This is particularly important in rural Scotland.
Many homes in areas such as Caithness still depend on heating oil because there is no mains gas network.
A prolonged rise in crude oil prices could mean higher costs when households refill their tanks.
Farmers
Agriculture is heavily dependent on fuel.
Tractors, machinery, transport and supply chains all rely on energy.
Higher fuel costs can increase production costs, which may eventually affect food prices.
Businesses
Transport companies, fishermen, builders, manufacturers and retailers all face higher energy and delivery costs.
In remote areas, where goods already travel longer distances, the impact can be greater.
Could It Increase the Oil Price Further?
The irony is that a charge intended to pay for security could itself increase insecurity in markets.
Oil traders would have to factor in another cost.
Countries importing energy would worry about higher bills.
Companies might look for alternative routes or supplies.
Markets generally dislike uncertainty, and uncertainty tends to push prices upwards.
Would Other Countries Accept This?
This is the major unknown.
Countries that rely heavily on Middle Eastern energy supplies, including many in Europe and Asia, would have their own views.
Some may welcome stronger protection for shipping.
Others may object strongly to the idea of paying a foreign government for access to a route considered vital to world trade.
If accepted, it could encourage other powerful nations to make similar claims over strategic routes.
That is why the debate goes beyond oil.
It is about who controls the arteries of global commerce.
A New Era for Energy Security?
The world has already learned that energy security is not just about finding oil and gas.
It is also about:
keeping shipping lanes open;
protecting infrastructure;
maintaining reliable supply chains;
avoiding political shocks.
The events around the Strait of Hormuz show how quickly a regional conflict can affect households thousands of miles away.
For people in the Highlands, the issue may seem distant, but the consequences are very local.
A decision made in Washington, Tehran or the Gulf could eventually influence the price of heating a home in Caithness, filling a vehicle, running a business or producing food.
The question remains:
Is a charge for protection a fair contribution towards security, or is it the beginning of a new kind of international toll system?