Washington Unveils $20 Billion Insurance Shield to Restart Oil Traffic in Strait of Hormuz

In a high-stakes move to prevent a global energy crisis, the administration of President Donald Trump has launched a massive $20 billion maritime reinsurance program designed to protect oil tankers and commercial vessels navigating the volatile Strait of Hormuz.

The initiative, announced Saturday, comes as military tensions between the U.S.-Israeli alliance and Iran have brought maritime traffic in the Persian Gulf to a near-standstill. Private insurers have recently withdrawn "war risk" coverage or spiked premiums to unsustainable levels, leading several Gulf producers to cut output due to an inability to ship crude through the narrow waterway.

The program is being spearheaded by the U.S. International Development Finance Corporation (DFC) in close coordination with the Department of the Treasury and U.S. Central Command (CENTCOM). The DFC will provide political risk insurance and financial guarantees for maritime trade on a rolling basis, filling the void left by private markets.

"We are confident that our reinsurance plan will get oil, gasoline, LNG, jet fuel, and fertilizer through the Strait of Hormuz and flowing again to the world," said DFC Chief Executive Ben Black.

The announcement follows a turbulent week in which U.S. crude prices surged over 12%, surpassing $90 per barrel. President Trump had previously signaled the move on social media, promising "very reasonable prices" for insurance and suggesting that the U.S. Navy could provide armed escorts for tankers if necessary.

The Strait of Hormuz is the world's most critical energy chokepoint, handling approximately 20% of global oil consumption and a fifth of the world’s liquefied natural gas (LNG). Officials hope this "safety network" will restore market confidence and stabilize prices, though some financial analysts remain skeptical that $20 billion will be sufficient to cover the total estimated risk exposure in the region.