Treasury Secretary Scott Bessent said a US insurance program meant to boost shipping through the Strait of Hormuz will begin soon, a move that may help revive flows of much of the world’s oil and gas supplies.
Bessent’s predictions, delivered Thursday during a meeting of President Donald Trump’s cabinet at the White House, come weeks after the president first announced the US International Development Finance Corporation would provide insurance guarantees with naval escorts to help ensure safe passage for oil tankers and other vessels through the strait.
Although the program was first unveiled March 3, there’s no evidence that any vessels benefiting from the initiative have passed through the strait, a chokepoint for roughly a fifth of global oil and gas flows.
“The oil market is well-supplied. We’ve taken actions to ensure that oil supplies stranded at sea are made available to the global market,” Bessent said. “Your bold actions, like the Development Finance Corporation’s maritime reinsurance program, in conjunction with Central Command, will soon provide shippers through the Gulf region with a level of security we have never seen before.”
Bessent’s remarks were delivered amid increasing concern about spiking oil and gas prices during the Iran war — and the threat that energy supply shocks will endure even once conflict ends. Trump’s now-postponed threat to hit power plants in Iran was met by the Islamic Republic’s vow that, in response, it would close the Strait of Hormuz “completely” and target regional energy facilities.
Though Trump said Thursday that Tehran allowed 10 tankers to sail through the strait, commercial vessels have largely avoided crossing the waterway since the war began on Feb. 28. Attacks by Iran have also damaged refining and gas processing infrastructure in the region, taking some supply offline and further complicating the chances for a swift resolution.
Insuring vessels is still possible, albeit at a very high cost. The Lloyd’s of London insurance market will continue to provide cover for ships traveling through the waterway, according to Chief Executive Officer Patrick Tiernan. That suggests it’s the threat of lethal military strikes from Iran, rather than a lack of insurance, that’s the primary obstacle to ships navigating the strait.