Middle East war: Trump proposes political risk insurance

Due to the high-intensity armed conflict, US President Donald Trump aims to secure marine transport in the Strait of Hormuz and the Persian Gulf.

The US government has therefore instructed the US International Development Finance Corporation (DFC) to provide political risk insurance and financial security coverage for vessels transiting the Gulf. This coverage is intended for all marine transport companies.

In addition to insurance protection, the US Navy could escort oil tankers through the Strait of Hormuz if necessary.

This measure comes just days after several insurance companies either reduced or withdrew war risk coverage for vessels operating in the region.

Insurers that continue to offer war risk coverage have also increased their premiums. The cost, which previously ranged between 0.15–0.25% of a vessel’s value, has risen to 1% or more since the outbreak of the conflict.