U.S. President Donald Trump on the 14th, local time, scrapped his plan to impose transit fees in the Strait of Hormuz a day after announcing it and instead decided to sign trade and investment agreements with Gulf states. Observers say Middle Eastern allies that had sided with the United States on the Iran issue have begun to directly intervene in the methods and expense of military operations, rather than merely being notified after the fact of White House decisions.
On the 14th, Trump wrote on his Truth Social that, "Based on very productive discussions with Middle Eastern leadership, we have decided to replace the 20% compensation fee the United States would receive with trade and investment agreements to be concluded between several Gulf states and the United States." Meeting with reporters the same day, he said, "I got calls from many countries, many people. They were kings and emirs," adding, "They said, 'We want to resolve this in a different way. We want to invest tens of billions of dollars in the United States.'" An emir is a title for a hereditary monarch in the Middle East, similar to a sultan, and serves as the supreme ruler in Qatar and Kuwait.
The previous day, Trump on the same Truth Social called the United States the "guardian of the Strait of Hormuz" and said he would charge 20% as security fees on all cargo passing through the strait. According to Axios, a U.S. political news outlet, the announcement came without prior consultation with the Gulf states. Citing multiple Gulf government officials, Axios reported that they demanded the White House "explain the policy's meaning and method of implementation" immediately after the transit fee announcement. Al Jazeera and others said Qatar's ruler, Sheikh Tamim bin Hamad Al Thani, spoke directly by phone with Trump that day to discuss the issue. It was not disclosed which other national leaders called directly, or the size and terms of the new investments Trump mentioned.
Gulf states had been conveying requests to the Trump administration to refrain from military action in the Middle East since February this year, before the Iran war broke out. In January, a month before the war began, Saudi Arabia lobbied the U.S. administration not to attack Iran. Qatar and Oman actively operated diplomatic channels between the United States and Iran. Saudi state news agency SPA reported that "Saudi Crown Prince Mohammed bin Salman said in a Jan. 26 phone call with Iranian President Masoud Pezeshkian that he would not allow his country's airspace and territory to be used for anti-Iran military action." Al Jazeera reported at the time that Gulf states sought to prevent escalation out of concern over Iranian retaliatory attacks, disruption of oil prices, and damage to their reputation as safe business hubs.
But this month the understanding was effectively scrapped, and as Iran targeted Gulf states for retaliation, the direction of their demands shifted. The Kuwaiti military said on the 14th that it intercepted one Iranian ballistic missile, five cruise missiles, and 33 drones, and that four service members were injured when a naval vessel was struck. The United Arab Emirates (UAE) Ministry of National Defense said on the 13th that two oil tankers passing through the Strait of Hormuz were hit by Iranian cruise missiles, killing one Indian crew member and injuring eight. In Bahrain, missile warning sirens sounded three times on the 14th alone. Gulf states have long argued that while they need U.S. forces for regional peace, they are the ones bearing retaliation and economic damage from a war started by the United States. Reuters, citing experts, reported that "Gulf states have shifted to demanding that the United States sufficiently degrade Iran's military capabilities and then withdraw."
Experts said the Gulf monarchies have moved beyond signaling support or opposition to U.S. policy and have begun to attach conditions to the objectives, scope, and expense of U.S. military action. They are not simply countries asking the United States for protection. They are countries that provide the locations and foundations that make U.S. military operations possible. For the Trump administration, Gulf allies such as Qatar, Bahrain, Kuwait, the UAE, and Saudi Arabia provide indispensable bases, airspace, and refueling, maintenance, and air defense infrastructure for U.S. operations around the world. Qatar's Al Udeid Air Base is the largest U.S. base in the Middle East, connecting Europe and Asia. The U.S. Navy's 5th Fleet headquarters is in Bahrain. U.S. Central Command (CENTCOM) said on the 14th that it was still deploying more than 20 U.S. Navy vessels and hundreds of military aircraft across the Persian Gulf area.
A significant portion of the investments in the United States prioritized by the Trump administration is also held by Gulf allies. Saudi Arabia, the UAE, and Qatar have pledged long-term investments totaling trillions of dollars in the United States. According to Reuters, Qatar pledged $1.2 trillion (about 1,790 trillion won), Saudi Arabia $1 trillion (about 1,490 trillion won), and the UAE $1.4 trillion (about 2,090 trillion won) in investments in the United States. Some of them are reportedly reviewing the allocation of their sovereign wealth funds overseas investments, totaling about $5 trillion (about 7,450 trillion won), to offset economic losses from the war since it began with Iran. Reuters, citing experts, said, "Gulf states can convey displeasure to the Trump administration by adjusting the pace and targets of their investments."
Trump told reporters on the 14th, regarding the Gulf leaders' investment proposals, "In fact, I like that approach. I don't think anyone should be able to charge fees in the strait." The remark reversed his own statement from the previous day in just one day. However, Trump only walked back the transit-fee issue and pursued even tougher pressure on Iran than the day before. The U.S. military from 4 p.m. that day again blockaded ships going to and from Iranian ports and carried out airstrikes on mainland Iran for a fourth straight day.
In a Fox News interview the same day, Trump warned, "Something really terrible will happen to them next week," threatening to destroy all power plants and bridges if Iran does not come to the negotiating table. The Islamic Revolutionary Guard Corps (IRGC) said the same day that "not a single drop of oil or gas will be exported from the region as long as U.S. attacks continue." As a result, Brent crude rose above $86 a barrel (about 128,000 won) on the 14th, the highest level in about a month.
Alex Vatanka, a senior fellow at the Middle East Institute (MEI) in the United States, said in a July 14 Al Jazeera interview that Trump's pressure-based approach to bringing Iran back to the negotiating table was "a gamble." He warned of the potential for escalation, saying, "Iran has consistently signaled that it responds to pressure not with concessions but with retaliation."