US to reinsure Gulf maritime losses up to $20 billion amid Iran war
Synopsis
The United States plans to provide up to $20 billion in reinsurance for maritime losses in the Gulf region to support oil and gas shipping disrupted by the Iran conflict. According to a Reuters…
The United States plans to provide up to $20 billion in reinsurance for maritime losses in the Gulf region to support oil and gas shipping disrupted by the Iran conflict. According to a Reuters report, the move aims to restore confidence among tanker operators and insurers after traffic through the Strait of Hormuz, a key global oil route, was severely affected by the ongoing hostilities.
Key highlights
- US to provide up to $20 billion in maritime reinsurance
- Plan aims to support oil and LNG shipping in the Gulf region
- Strait of Hormuz typically carries about 20% of global oil trade
- War-risk insurance premiums have surged amid conflict
- Coverage will focus initially on hull, machinery and cargo insurance
The United States plans to provide up to $20 billion in reinsurance coverage for maritime losses in the Gulf region, aiming to stabilise oil and gas shipping disrupted by the conflict involving Iran.
The measure is intended to restore confidence among tanker operators and insurers after shipping through the Strait of Hormuz, one of the world’s most important energy routes, was severely affected by the hostilities.
The plan was reported by Reuters and involves the US International Development Finance Corporation (DFC) providing insurance support linked to shipping operations in the region.
Washington moves to stabilise tanker traffic
The US government is preparing a large insurance backstop to support maritime trade.
According to the report, the DFC will offer reinsurance protection for losses of up to $20 billion, covering shipping risks tied to the conflict in the Gulf.
President Donald Trump previously directed the agency to provide political risk insurance and financial guarantees to maintain maritime trade in the region.
Shipping activity through the Strait of Hormuz, which carries roughly 20% of global oil supplies each day, has slowed significantly after tanker transit was disrupted by the conflict near Iran.
Several shipments have been affected, with some tankers damaged by strikes and others stranded, contributing to delays in oil deliveries.
Rising insurance costs strain global shipping
War-risk insurance costs for vessels operating near the Gulf have increased sharply since the conflict intensified.
Some maritime insurers have reduced coverage or withdrawn policies entirely, raising concerns about the ability of oil tankers to continue operating in the region.
The US government-backed reinsurance program aims to provide financial protection for insurers and shipping companies, encouraging vessels to resume operations despite the security risks.
The DFC program will initially cover hull and machinery damage as well as cargo losses, operating on a rolling basis.
Officials say plan could restore flows quickly
US Treasury Secretary Scott Bessent said the insurance support, combined with possible naval escorts, could help shipping flows recover relatively quickly.
According to the Reuters report, he suggested disruptions could ease within weeks if the measures prove effective.
However, maritime experts warn that the success of the program will depend largely on the security situation.
Noam Raydan, a senior fellow at the Washington Institute for Near East Policy, said the maritime sector may remain cautious if tensions escalate.
She also warned the situation could worsen if Iran-backed Houthi forces resume attacks on ships in the Red Sea, potentially creating additional risks for global trade routes.
Coordination underway between US agencies
The US Treasury Department and the DFC are coordinating with US Central Command to implement the program and monitor security conditions in the Gulf.
Officials said the agency will work with selected US insurance partners, though details about participating companies have not yet been disclosed.
Markets will closely watch whether the insurance backstop helps restore tanker traffic through the Strait of Hormuz in the coming weeks.
FAQs
Q1. Why is the US offering maritime reinsurance in the Gulf?
To support oil and gas shipping disrupted by the Iran conflict and rising war-risk insurance costs.
Q2. How much insurance coverage will the US provide?
The program will offer up to $20 billion in reinsurance for maritime losses in the Gulf region.
Q3. Why is the Strait of Hormuz critical to global energy markets?
About 20% of the world’s daily oil supply passes through the narrow shipping route.
Q4. Could naval escorts be used to protect ships?
US officials have suggested naval escorts may support shipping, though operational details remain unclear.
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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