US President Donald Trump on Wednesday said the United States is prepared to step in to protect global shipping moving through the Strait of Hormuz, announcing new financial safeguards for maritime trade and signalling that US naval escorts could be deployed if required.
The announcement came in a post on Trump’s social media platform Truth Social, where the president said Washington had ordered immediate measures to stabilise shipping activity in the Gulf after Iran closed the strategic waterway earlier this week.
“Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf,” Trump wrote.
He added that the programme would be available to all global shipping companies operating in the region.
“This will be available to all Shipping Lines,” the US president said.
Trump also indicated that the US Navy could directly intervene to escort vessels if commercial shipping remains at risk.
“If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible,” he wrote.
The president framed the move as part of a broader effort to ensure that global energy supplies continue to move freely despite rising tensions in West Asia.
“No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD,” Trump said in the post.
Strait Of Hormuz Closed Earlier This Week
Trump’s announcement follows Iran’s decision to close the Strait of Hormuz on March 2, dramatically escalating the confrontation involving Iran, Israel and the United States.
According to Iranian state media, Brigadier General Sardar Ebrahim Jabari, a senior adviser to the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps (IRGC), warned that vessels attempting to cross the waterway could face attack.
“The strait is closed. If anyone tries to pass, the heroes of the Revolutionary Guards and the regular navy will set those ships ablaze,” Jabari was quoted as saying.
The Strait of Hormuz is a narrow maritime corridor connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea. At its narrowest point, the passage is about 33 kilometres wide, while shipping lanes in each direction measure only around three kilometres.
Because of its geography and the volume of traffic that passes through it, the waterway is widely considered one of the world’s most important energy chokepoints.
A Vital Route For Global Oil And Gas
The strategic significance of the Strait of Hormuz stems from its central role in global energy trade.
Roughly one-fifth of the world’s oil consumption moves through the corridor each day. Data from energy analytics firm Vortexa shows that more than 20 million barrels of crude oil, condensate and refined fuel passed through the strait daily on average last year.
Several members of the Organisation of the Petroleum Exporting Countries (OPEC), including Saudi Arabia, Iran, Iraq, Kuwait and the United Arab Emirates, rely heavily on the route to export crude oil to global markets, particularly Asia.
Qatar, one of the world’s largest exporters of liquefied natural gas, also ships nearly all of its LNG cargoes through the strait.
Any disruption to shipping through this corridor can therefore trigger immediate concerns across global energy, shipping and financial markets.
Shipping And Insurance Costs Begin Rising
Industry specialists say the growing tensions have already begun affecting shipping operations and insurance markets.
Balasundaram R, head of marine insurance at Policybazaar, said freight carriers are likely to face higher premiums to restore war-risk coverage for shipments travelling through high-risk areas.
“It is reasonable to expect that Indian oil companies will have cargo exposures and SCI will have hull exposure in this region. Oil prices are also likely to face upward pressure in the near term,” he said.
Gaurav Agarwal, head of marine specialities at Prudent Insurance Brokers, said insurers have already issued notices cancelling existing war-risk coverage for vessels.
“Notice of cancellation of war cover has been issued on hull on March 1, and a similar cancellation on cargo is expected soon,” Agarwal said.
Once such coverage is withdrawn, insurers may offer fresh war-risk protection only at significantly higher premiums.
“If the conflict becomes a serious war risk, insurance premiums for ships are likely to go up, and insurance companies may adjust pricing quickly based on the risk level,” Agarwal said.
According to Hari Radhakrishnan of the Insurance Brokers Association of India (IBAI), marine insurance policies typically allow war and SRCC (strikes, riots and civil commotion) coverage to be withdrawn with three to seven days’ notice.
“Once cancelled, fresh war risk cover may become unavailable — or, where still offered, priced at prohibitively high levels,” he said.
Insurance specialists say premiums that earlier ranged between 0.25 per cent and 0.5 per cent have already risen to around 1 per cent, increasing shipping costs for cargo moving through high-risk zones.
Ships Waiting As Trade Routes Adjust
Experts say several cargo vessels that had already departed from India are currently anchoring in international waters while waiting for clarity on the situation.
Shipping lines are exploring alternative routes where possible, although longer diversions could increase transportation costs for importers and exporters.
Beyond maritime insurance, the conflict could also affect other sectors of the insurance industry.
Radhakrishnan noted that aviation hull war risk coverage for airline fleets may see higher premiums and tighter underwriting capacity. Travel and event insurance may also face higher cancellation risks.
The broader economic effects could include supply chain disruptions, rising costs and volatility in financial markets.
Against this backdrop, Trump’s announcement suggests Washington is prepared to intervene more directly if commercial shipping through the Gulf remains threatened.
Whether US naval escorts are eventually deployed will depend on how the situation around the Strait of Hormuz develops in the coming days.
