President Donald Trump has abandoned the idea of imposing a 20% fee on all vessels traveling through the Strait of Hormuz after floating the idea on Monday, demanding compensation in exchange for safe passage through the waterway.

Trump Touts Deals With Gulf States

During a press briefing at the White House on Tuesday, Trump said that Washington had been guarding the Strait for "many years" without compensation, which did not seem fair to him. The decision, according to the President, was taken with the benefit of Gulf state allies in mind, as the U.S. did not need the oil, he said.

Trump then said that he was "called by different people, different countries, Kings and Emirs," who suggested a different approach. "We'd love to invest in the United States with billions and billions of dollars," he said, "as opposed to charging a fee," he added.

He then opposed the idea of a fee on the Strait of Hormuz. "I like that actually because I don't think anybody should be able to charge a fee for the Strait or for any other strait relationship in terms of other sections of the world," Trump shared. He then clarified that the U.S. had touted the idea as a reimbursement for its efforts.

Trump said that Saudi Arabia, Bahrain, Qatar, Kuwait, the UAE and other countries would be investing "record amounts" in the U.S., reiterating that the U.S. was protecting the region for countries, including China for years without compensation.

CENTCOM Announces Fresh Strikes

Meanwhile, the U.S. Central Command (CENTCOM) announced a fresh round of strikes against Iran on Tuesday, saying it had hit dozens of targets near the Strait of Hormuz and the Iranian coast.

"The strikes took place the same day U.S. forces resumed the naval blockade against vessels transiting to or from Iranian ports and coastal areas," CENTCOM said.

Earlier, GasBuddy analyst Patrick De Haan had shared that the naval blockade by the U.S. could result in global oil prices surging, as well as lead to a hike in gas prices in the U.S. "Gas prices will likely continue to climb as escalations continue," De Haan said.

Iranian Foreign Minister Reaffirms Command Over Strait of Hormuz

Iran's Foreign Minister, Abbas Araghchi, said that Trump was "absolutely right" in demanding compensation for ensuring safe passage through the waterway that is responsible for a fifth of the world's crude oil supply. However, he said that a 20% fee was too high and that Iran would be fair with its fee in its role as the Guardian of the Strait.

CENTCOM had earlier rejected Iran's authority over the region, saying that it had facilitated the movement of 800 commercial vessels through the area since May.

Oil, Gas Surge

Oil futures prices have been rising as escalating tensions cast uncertainty over global markets. The West Texas Intermediate (WTI) crude recorded a 0.93% surge, trading at $80.08/barrel at press time.

Brent crude futures, on the other hand, reached $85.81/bbl at the time of writing this article. Oil ETF United States Oil Fund (USO) surged 0.20% to $120.41 during the after-hours session on Tuesday.

On the gas front, data collected by the American Automobile Association (AAA) showed that the national average price for a gallon of gas was $3.8590 on Tuesday. Diesel was at $4.8820/gallon, up from Monday's $4.8750/gallon, but down from last month's $5.2190/gallon.