"I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States," Trump wrote on Truth Social on Tuesday morning.
Trump cited "highly productive conversations with Middle East leadership" as one reason for his reversal.
Brent Crude futures hovered around $84 after the announcement, up just under 2% on the day.
It had been unclear how Trump planned to impose the fee, which he said would reimburse the US for costs incurred in reinstating a blockade on the Strait and ensuring the safe passage of ships through one of the world's most critical trade chokepoints.
Global shipping companies like Hapag-Lloyd had pushed back on Trump's 20% fee proposal. Others pointed out that US officials, like Secretary of State Marco Rubio, had previously said that fees shouldn't be imposed for accessing international waterways.
