US President Donald Trump stepped back from a proposal to charge a 20% fee to guard the Strait of Hormuz as part of the conflict with Iran, saying on Tuesday he would instead seek investment deals in the region.
US forces had carried out waves of attacks for the third night in a row after Tehran said it had closed the strait, prompting Trump on Monday to reinstate a blockade of Iranian shipping and propose the fee.
But just a little under five hours before the fee had been due to come into effect at 2000 GMT, Trump said the strait was open to all shipping traffic except that of Iran.
Oil futures prices pared their gains after the post after rising earlier on Tuesday.
The worsening attacks had increased doubts that a memorandum of understanding signed last month would lead to a permanent halt in the war, which has disrupted global energy supplies and raised fears of a rise in inflation globally.
Iran had hit back by attacking Jordan with ballistic missiles while Bahrain said it had fended off an Iranian aerial attack. Jordan said it had shot down four ballistic missiles and explosions were heard in Manama, Bahrain's capital.
Before the war, about a fifth of global oil and gas traffic passed through Hormuz daily. If the US were to impose a 20% fee, it could generate around $240 million a day.
The UN shipping agency said it opposed any fees for straits used in international navigation and that there was no legal basis for introducing mandatory tolls on strait transits.
