The International Development Finance Corporation (DFC) and the United States Department of the Treasury will launch a multi-billion-dollar ship reinsurance program in the Persian Gulf, with coverage up to $20 billion, aimed at normalizing maritime shipments in the region amid rising risks due to the conflict with Iran.
According to the DFC statement, “the permanent reinsurance mechanism will insure losses of approximately up to $20 billion.”
In the first phase, hull and machinery of ships and cargoes will be insured. It is noted that for direct insurance services the corporation selected partners predominantly American – insurance companies.
Ship reinsurance strategy in the Persian Gulf
According to DFC CEO Ben Black, the program is intended to normalize the supply of oil, LNG, fertilizers, and other goods through the Strait of Hormuz amid the conflict with Iran.
“In cooperation with the U.S. Central Command, DFC coverage will provide a level of security that no other program can offer. We are confident that our reinsurance mechanism will enable oil, gasoline, LNG, aviation fuel and fertilizers to again move through the Strait of Hormuz to other countries around the world”
– Ben Black
U.S. Treasury Secretary Scott Bessent, in an interview, stated that the administration is prepared to provide escort for commercial ships through the Strait of Hormuz with U.S. Navy vessels, and these operations could begin in one to two weeks.
“This program will provide insurance to shippers, regardless of whether they are carrying oil, commodities, or fertilizers… We will await information from CENTCOM (U.S. Central Command) – when, in their view, safe passage will be possible. I do not know if it will take a week or two, but we are on the path to solving this issue”
– Scott Bessent
According to the latest reports, as of March 2, only nine commercial vessels have passed through the Strait of Hormuz.
This initiative is designed to ensure stable transit of energy supplies and cargoes through key sea routes in the region, reduce risks for transport providers, and support global trade amid ongoing tensions around the region.