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The International Maritime Organization Opposes Donald Trump's Proposed 20% Transit Fee for International Shipping

The International Maritime Organization (IMO) has expressed opposition to a proposed 20% transit fee suggested by Donald Trump, stating that the fee lacks a sufficient legal basis. The organization maintains a consistent stance against charges levied on vessels navigating international straits. Industry experts, including NAT CEO, have labeled the 20% fee as unrealistic. Meanwhile, the Strait of Hormuz remains a critical maritime chokepoint, where the Iranian oil tanker blockade has created significant economic pressure. The blockade has led to a14% increase in floating storage of Iranian crude, reaching 135 million barrels. This supply disruption has compressed the discount for Iranian Light crude, narrowing from $5 to $4 per barrel below ICE Brent. Market reactions to the blockade and rising oil prices have influenced the broader economy. Traders are increasing bets on a Federal Reserve rate hike in July, with the probability of a 25-basis-point hike rising to 43%. Consequently, spot gold prices have tumbled, as the "rate-hike trade" has begun to outweigh safe-haven demand typically seen during Middle East tensions.

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