The US will offer political risk insurance and naval convoys for ships transporting energy and other commodities through the Mideast Gulf, President Donald Trump said on Tuesday.
Trump said he ordered the US government finance provider Development Finance Corporation "to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy."
Ship traffic through the strait of Hormuz — the world's most critical shipping lane for oil, LNG and other commodities — has almost ground to a halt since US and Israeli forces struck Iran on 28 February. Total traffic through the strait is down by 94pc since the start of fighting.
"If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible," Trump said.
Major protection and indemnity (P&I) clubs' re-insurers will cancel war risk coverage in certain areas of the Mideast Gulf and the Gulf of Oman, according to notices issued to their members on 1 March.
These clubs include the London P&I, UK-based Steamship Mutual Underwriting Association, American P&I, Norway-based Gard and the Swedish Club. This comes after Oslo-based marine insurance provider Skuld and UK-based NorthStandard P&I cancelled war risk coverage for areas in the Mideast Gulf and the Gulf of Oman.
