The difficulties in fulfilling Trump's promises regarding risk insurance, according to shipowners and insurance brokers, do not address the main problem facing vessels in the Strait of Hormuz, reports The Wall Street Journal. Marcus Baker, head of the global marine and cargo insurance department at broker Marsh, noted that the British market Lloyd’s of London is "open for business," but insurance is not in demand. According to him, the main issue is not the lack of insurance policies, but ensuring the safety of crews. Jerry Kalogiratos, CEO of Capital Clean Energy Carriers, added that his company operates more than 20 LNG tankers and faces similar challenges.
Another problem is that American companies are virtually not engaged in specialized marine insurance, while Lloyd’s of London holds a leading position in this area. To implement Trump's plan, the U.S. International Development Finance Corporation (DFC) received $20 billion, and American officials began reaching out to London insurers to understand the market specifics. Industry representatives reported that some were asked to provide confidential information, which they refused to disclose.
David Smith, director of marine insurance at the brokerage McGill and Partners, emphasized that:
“There is a whole ecosystem around military risk insurance. American insurers very rarely enter this ecosystem.”
Realizing that organizing insurance would not be possible, the DFC adjusted its plans and offered $20 billion for reinsurance (insurance for insurers). According to a DFC representative, this offer will be limited to vessels that meet certain criteria, which have not yet been disclosed.
“There is very little information about who exactly this will apply to, and the reports are contradictory,” Smith noted.
The American program may reduce insurance costs in the Persian Gulf (currently 1-2% of the vessel's value, while in peacetime it is 0.25%), but it does not resolve the issue of resuming shipping. Insurance brokers believe this is impossible without organizing convoys under the protection of warships, but Washington has provided no information on the prospects for such convoys.
Meanwhile, French President Emmanuel Macron has sent 12 ships to the Persian Gulf to organize a "purely defensive mission to escort vessels," which will be carried out in cooperation with European and non-European states. According to him, the escort of container ships and tankers through the Strait of Hormuz can only begin after the "most intense phase of the conflict" is over.
The conflict does not seem to be coming to an end. On Thursday, Iran attacked two tankers near Iraq and a container ship off the coast of the UAE, while Iraq closed all its oil terminals. Since the beginning of the conflict, the number of damaged vessels has already exceeded a dozen.
On Tuesday, U.S. Energy Secretary Chris Wright posted on X that the U.S. Navy "successfully escorted" an oil tanker through the Strait of Hormuz, which caused Brent oil prices to fall to nearly $85 per barrel. However, two hours later, his post was deleted.
White House Press Secretary Caroline Levitt denied the information about military escort. Iranian Foreign Minister Abbas Araghchi accused American officials of "spreading fake news to manipulate the markets." As a result, oil prices rose again and surpassed $100 per barrel in morning trading on Thursday.
On Wednesday, 32 countries that are part of the International Energy Agency decided to release a record volume of oil from strategic reserves to the market – 400 million barrels (of which 172 million will come from the U.S.). Arnab Datta, managing director at the Washington think tank Employ America, which advocates for more active use of reserves, expressed dissatisfaction:
“I was struck by the lack of preparation [of the Trump administration] for the consequences that a war in Iran could have for the energy market. They are absolutely unprepared.”
