- The US doubled its maritime insurance for Strait of Hormuz ships to $40 billion
- The initial $20 billion facility covered war risk for Gulf vessels, led by Chubb
- Traffic through the strait has dropped 90% since Iran closed the waterway in February
The United States has doubled its maritime insurance programme for ships transiting the Strait of Hormuz to $40 billion, bringing in new international partners as Washington struggles to restore flows through a waterway that carries roughly a fifth of the world's oil and gas supplies.
The expansion builds on a facility first unveiled in early March. The Trump administration launched a $20 billion maritime reinsurance facility through the US International Development Finance Corporation, coordinated with US Central Command and the Treasury Department, to cover war risk for vessels operating in the Gulf region.
The programme initially focused on hull, machinery and cargo losses, with insurance giant Chubb named as lead underwriter.
DFC chief executive Ben Black said at the time that the agency was "confident that our reinsurance plan will get oil, gasoline, LNG, jet fuel and fertiliser through the Strait of Hormuz and flowing again to the world." But weeks on, the results have been modest at best.
Although the programme was first unveiled March 3, there has been no clear evidence that any vessels benefiting from the initiative have passed through the strait, a choke point for roughly a fifth of global oil and gas flows.
The scale of the challenge is formidable. Traffic through the Strait of Hormuz has fallen around 90% from the historical average of roughly 138 transits per day since Iran effectively closed the waterway following the outbreak of US-Israeli strikes on February 28.
Some insurers have estimated that worst-case exposure for the approximately 1,000 vessels currently trapped in the Persian Gulf could hit $40 billion or even higher, the figure that now appears to set the floor for the expanded US guarantee.
The insurance expansion comes as a broader diplomatic push takes shape in parallel. More than 40 US allies met this week to discuss plans to reopen the Strait of Hormuz, convened by the UK and including nations from Europe, the Middle East and Asia, weighing both diplomatic outreach to Tehran and potential sanctions if the waterway remains blocked.
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