Trump Scraps Hormuz Transit Fee, TACO Pattern Returns

Other key waterways charge far less. The Suez Canal, operated by Egypt’s state-owned authority, costs about $380,000 for one Suezmax tanker passage as of July 1, Bloomberg data show. The Panama Canal charges between $350,000 and $400,000 for a medium-sized oil tanker, though auctioned slots can hit $1 million during droughts or geopolitical disruptions. The Turkish Straits, governed by the Montreux Convention, levy service fees: a Suezmax tanker pays roughly $240,000 for a round trip.

Several major straits impose no transit toll at all. The Strait of Malacca, linking the Indian Ocean with the South China Sea, receives only voluntary contributions for navigational aids. The Bab el-Mandeb, gateway to the Red Sea, has no fees. The Danish Straits and the Cape of Good Hope are also toll-free.

By comparison, a 20% Hormuz fee would have been orders of magnitude larger than any existing charge. For a standard crude tanker carrying $100 million in cargo, the levy would have reached $20 million per crossing, dwarfing even the $380,000 Suez Canal fee.

Oil futures showed little reaction to the withdrawal. Traders said the proposal was viewed as unlikely to survive from the start, given the rapid pushback from Gulf states and shipping lines. The episode may reduce the weight markets assign to future Hormuz-related threats, several traders added.

Trump’s decision to scrap the fee and pursue bilateral deals eases that near-term risk. The underlying standoff between the U.S. and Iran, however, keeps the waterway a flashpoint. Iran has threatened to block Hormuz in the past. For now, tankers continue to transit without extra cost.