President Donald Trump said he has directed the US Development Finance Corporation to provide “insurance and guarantees“ for ships traveling through the Persian Gulf, while also suggesting that the US Navy escort tankers through the Strait of Hormuz “if needed“.
“Effective immediately, I have directed the US Development Finance Corporation (DFC) to provide, at very reasonable cost, political risk insurance and guarantees for the financial security of all maritime commerce, particularly energy, traveling through the Persian Gulf. This will be available to all shipping lines,” Trump wrote on Truth Social.
“If necessary, the U.S. Navy will begin escorting tankers through the Strait of Hormuz as soon as possible. No matter what, the U.S. will ensure the free flow of energy to the world. The U.S. economic and military power is the greatest on Earth - more action is coming,” he added.
This week, Iran threatened to attack ships passing through the strait, and several tankers have already been attacked in the area. A number of marine insurers, including Skuld, Steamship Mutual and North Standard, have told their clients they have stopped covering any war-related damage in the surrounding waters.
“I don't think Iran can close the Strait of Hormuz, but insurance companies and ship operators can,“ Tom Kloza, an independent oil analyst who advises Gulf Oil, previously told CNN.
Trump's program would aim to cover ships that have lost their insurance - without which they would be saddled with the cost of any oil lost in an attack.
As a result, the strait is effectively closed: Only two oil and chemical tankers passed through it on Monday, according to data from S&P Global Commodities at Sea shared with CNN. Typically, 60 ships pass through the strait each day, carrying about 20% of the world's oil flows.