US commits up to $20 billion in reinsurance for maritime losses in Gulf region
United States Government has announced plans to offer reinsurance for maritime losses in the Gulf region, with coverage extending up to approximately $20 billion. This decision follows disruptions in oil and liquefied natural gas tanker transit through the Strait of Hormuz, a strategic waterway between Iran and Oman that typically handles about 20 per cent of the world’s oil shipments daily.
President Donald Trump has directed the Development Finance Corporation (DFC) to provide political risk insurance and financial guarantees to bolster the flow of maritime trade in this vital corridor.
The new reinsurance support will be provided on a rolling basis, with initial attention given to hull and machinery as well as cargo insurance, according to the DFC. The move aims to address risks to vessels and cargoes operating in the region, which have arisen amid the halt to regular transit. The DFC stated that the insurance would be available to support continued operations while immediate threats to shipping persist.
The Strait of Hormuz’s disruption has led authorities to develop this targeted insurance facility to sustain confidence among oil and gas shippers. The coverage is expected to maintain stability in maritime trade by ensuring that insurers and shipping companies can manage political and operational risks effectively. The DFC’s role will be central to the deployment of these financial guarantees during the period of uncertainty in the Gulf.
The announcement underscores the scale of US involvement in supporting energy trade infrastructure at a time when a significant proportion of global oil supply is impacted. US government sources reiterated the importance of safeguarding maritime passage through the Strait of Hormuz and ensuring the continuity of energy shipments for international markets. The DFC’s insurance mechanism is a response to the immediate challenges facing the sector.
