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Posted on 04/22/2026 5:56:11 AM PDT by Miami Rebel
On Mar. 6th, President Donald J. Trump issued, “effective immediately”, a directive ordering the U.S. International Development Finance Corporation (“DFC”) to act as a federal “sovereign backstop” for qualified private insurance companies providing Hull & Machinery and Cargo coverage to shipping companies operating in the Persian Gulf. The backstop will take the form of a $20 billion reinsurance facility (“Reinsurance Facility”) available to qualified private insurance companies, as well as shipping lines. While the official list of qualified insurers has not yet been issued, Chubb, AIG, Liberty Mutual, and, significantly, Lloyd’s of London acknowledged active participation in negotiations with the DFC. While the facility’s core is reinsurance of Hull & Machinery and Cargo risks, the DFC has explicitly stated that it will also cover war risk and provide support directly to the maritime industry in the Persian Gulf. The stated purpose of the Reinsurance Facility is to reduce war risk premiums for shipping through the Strait of Hormuz and ensure the free flow of oil, liquified natural gas (“LNG”), and other energy commodities through the region.
Private Insurers (as Partners): The Reinsurance Facility is designed to support “key maritime insurance providers.” By taking on the “first-loss” or most extreme risks, the U.S. government allows private firms to keep writing policies they otherwise would have abandoned. Shipping Lines and Charter: The Reinsurance Facility authorizes political risk insurance and guarantees directly to “all shipping lines” transiting the Strait of Hormuz. Energy Producers and Consumers: While open to all maritime trade, the program prioritizes energy shipments. This includes tankers carrying crude oil, gasoline, LNG, and jet fuel, ensuring that refineries do not run dry and that global energy prices stabilize. American and Allied Businesses: The DFC states its primary goal is to support U.S. and allied interests operating in the Middle East, offering a “foundation for a new era of lasting peace and prosperity” by removing the financial barriers to trade. The U.S. Navy will provide escorts “if necessary” to any ship to ensure the “free flow of energy to the world” following threats from Iran to block the strategic waterway. Several London publications speculated that if the DFC’s $20 billion facility becomes a permanent fixture for “systemic stabilization,” it could shift the center of maritime finance from London to Washington.
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“a growing backlog of aging tonnage that is expected to head for the breaking yards in the coming years. Included in the backlog are hundreds of tankers operating in the so-called dark fleet”
https://shipbreakingplatform.org/platform-publishes-list-2025/
There are hundreds of tankers of little value available for Strait transit use. These tankers might proceed to India, which is a short trip away. The oil can be shipped on from India as Russian oil has been.
Getting access to Gulf oil is not our problem.
China has the second-best surface fleet in the world.
A cheap old tanker can be sailed in parallel to the north of a tanker carrying crude.
Iranian missiles probably aren’t smart to skip over the relatively cheap ship.
There is something like $166 billion in potential tariff refunds that could be subjected to a special 100% income tax and the proceeds used to issue Gas Price Help checks to owners of insured motor vehicles.
Of course that’s nonsense. Oil and LNG don’t know borders. For all our independence, the closing of the Strait is a drain on our economy.
“For all our independence, the closing of the Strait is a drain on our economy.”
How?
Forget naval escorts; have you ever considered insuring the insurers?
Where will you find a crew for that decoy ship?
LOL. This belongs with your “bit of levity” post from yesterday.
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