President Donald Trump has ordered the U.S. International Development Finance Corporation (DFC) to serve as a backstop insurer for maritime trade in and around the Persian Gulf and the Strait of Hormuz.
The mover offers political-risk-style coverage and guarantees for shippers, aimed at keeping oil and other cargo moving through the region.
“Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf. This will be available to all Shipping Lines,” Trump wrote on Truth Social.The move comes as tensions with Iran escalate and fighting in the region raises concerns about the safety of oil tankers and other commercial vessels. The Strait of Hormuz — a narrow waterway between Iran and Oman — is one of the world’s most important oil routes, and any disruption there can quickly impact global energy prices.Trump said the insurance would be available immediately to all shipping lines at what he described as a “very reasonable price,” helping companies manage the financial risks of operating in a conflict zone.
Trump also indicated he would be willing to arrange for the US Navy to escort ships through the region.
He added that if it becomes necessary, the U.S. Navy will be tasked with escorting tankers through the Strait of Hormuz, a mission reminiscent of Operation Earnest Will (the “Tanker Wars”) in the late 1980s. During Earnest Will, participating foreign tankers were required to reflag into the U.S. registry to obtain protection.”No matter what, the United States will ensure the free flow of energy to the world,” Trump promised. “The United States’ economic and military might is the greatest on earth.”
The policy is aimed at preventing a fresh surge in global energy prices as the U.S. signals it will sustain (and potentially expand) military operations against Iran. Brent crude (a type of crude oil from the North Sea fields used as a benchmark for oil pricing) has already climbed roughly 14% since the fighting began last weekend, and prices could rise further if major export routes and terminals remain disrupted or shut.
However, there is some intriguing background related to insurance, shipping, and the Strait of Hormuz, which the Iranians had intended to use as an economic weapon.
In the past few days, insurers have begun canceling policies due to the new conflict.
Marine insurers are cancelling war risk coverage for vessels and oil shipping rates are set to surge further after the widening Iran conflict left at least three tankers damaged, a seafarer killed and 150 ships stranded around the Strait of Hormuz….Companies including Gard, Skuld, NorthStandard, the London P&I Club and the American Club said their cancellations would take effect from March 5, according to notices dated March 1 on their websites.War risk cover will be excluded in Iranian waters, as well as the Gulf and adjacent waters, according to the notices.Skuld added in its notice that it was working on a buy-back option to reinstate cover.
Several of these entities are Lloyd’s of London market participants. Lloyd’s underwrites a significant portion of the world’s marine cargo. Maritime transportation and policy expert John Konrad theorizes that policy cancellations may be due to a lack of intelligence information, a consequence of the British government’s recent posturing and lack of support for US military bases.
So if Lloyd’s pricing advantage flows from MI6, and MI6’s best intelligence flows from the US… what happens when that data pipeline gets throttled?All indications are that @Keir_Starmer was blindsided by the size and scope of the US/Israel strikes on Iran this weekend. That alone tells you something about the current state of transatlantic intelligence sharing.And we know there has been serious anger in Washington over the UK’s decision to sell Diego Garcia, home to America’s most strategically important base in the Indian Ocean, to Mauritius.It is not a huge leap to conclude that the submarine cables linking Langley to London have gone dark, or at minimum have been significantly throttled.
Trump may be planning to reshore marine insurance to the U.S., which seems like a wise idea based on what has been happening in the United Kingdom.
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