FT: Trump may force foreign ships to buy US insurance for escort through Hormuz

The Trump administration has explored plans requiring commercial vessels escorted by the US Navy through the Strait of Hormuz to purchase US government-backed insurance, according to sources familiar with the discussions.

President Donald Trump previously said the United States would provide insurance for commercial ships navigating the strategic waterway, as threats of closure have left vessels stranded in the Gulf and pushed Brent crude prices above $105 per barrel, Caliber.Az reports, citing The Financial Times. 

Earlier this month, the US Development Finance Corporation (DFC), the government’s international investment arm, unveiled a proposal to offer up to $20 billion in reinsurance to support ships passing through the strait alongside naval escorts.

Officials have since explored making it mandatory for vessels seeking a US Navy escort to purchase insurance through a program run by the DFC in partnership with private insurer Chubb, rather than obtaining coverage on the commercial market.

It remains unclear whether the administration will implement the mandatory aspect of the program, which industry experts say could generate tens of millions of dollars in profit if ships avoid damage from Iranian attacks.

Under the proposed system, ships would need to buy US government insurance covering hull, machinery, and cargo to qualify for a naval escort, sources in the insurance market told reporters.

However, significant uncertainty remains over whether the naval protection promised by Trump will be available, with sources noting that coverage may not be in place for at least a week.

By Khagan Isayev