President Donald Trump has reversed his threat to impose a 20% tariff on all cargo transportation through the Strait of Hormuz, as the United States fights to break Iran’s control over the waterway.

He said the toll would be replaced by trade and investment deals with Gulf states, just hours before the United States resumes its blockade of Iranian ports.

This follows new attacks between the United States and Iran, which caused a sharp rise in oil prices while tanker traffic through the Strait virtually came to a standstill.

The United States previously said it had carried out a third night of strikes to degrade Iran’s ability to attack shipping in the area, and on Tuesday Iranian state media reported explosions in several cities, including Bushehr, which is home to a nuclear power plant.

Tehran said it had attacked US military facilities in Bahrain and Jordan after previously attacking two United Arab Emirates oil tankers.

The ongoing attacks have underscored the strategic importance of the Strait. Iran accuses the United States of interfering in its management of Hormuz, but controlling it means Tehran can also threaten the global economy.

Trump declared on Monday that the United States was now the “guardian” of the Strait of Hormuz and promised to impose a 20% fee on all cargo sent through the waterway to pay for protecting it.

To further raise the stakes, Trump said the United States would also reimpose its naval blockade on Iran, in a bid to further squeeze the country’s troubled economy.

The US Central Command (Centcom) said on Monday that the US naval blockade of Iranian ports would take effect from 16:00 ET (20:00 GMT/21:00 BST) on Tuesday.

But in his latest post on Truth Social, Trump wrote: “I have decided to replace the US 20% refund fee with trade and investment deals that the various Gulf States will make in the US.

“Those investments will be MASSIVE but, at the same time, extraordinarily good for them and their future.” The US president did not provide further details.

He also said that the Strait “is open to ALL maritime traffic except Iran” and that “oil is flowing like never before, thanks to the impressive power of the United States military.”

Speaking later, after talks in Washington with new Iraqi Prime Minister Ali al-Zaidi, Trump said: “I don’t like the concept of a tariff, but at the same time, it’s not fair that we’re protecting this Strait for everyone.”

It said it had changed its initial rate plan after receiving numerous calls from Gulf leaders.

Meanwhile, maritime data shows cross-strait traffic has slowed to its lowest level in two months. The Brent crude oil benchmark price has also risen sharply.

Iran effectively closed the waterway – through which around 25% of the world’s oil and 20% of the world’s liquefied natural gas previously passed – after the United States and Israel launched attacks on Iran on February 28.

In a separate development on Tuesday, Israeli Prime Minister Benjamin Netanyahu warned that his country’s retaliation against Iran would be “much more powerful” if it is attacked first.

“I will tell the leaders of Iran: do not count on things to remain calm if they attack us,” he said in a video posted on his social networks.