As the conflict between the United States and Iran continues to escalate, the White House is taking direct action to prevent a full-blown global energy crisis. President Donald Trump announced that the U.S. will provide both naval escorts and federal insurance backing for oil tankers navigating the Strait of Hormuz, a narrow but vital chokepoint through which roughly one fifth of the world’s energy supply passes.
Trump posted on social media that the U.S. International Development Finance Corporation would offer insurance at competitive rates to help keep commercial energy trade moving through the Gulf. He added that the Navy would begin escorting tankers through the strait as soon as possible if the situation demanded it.
The announcement came after oil prices surged more than 10% following the start of U.S. and Israeli military operations against Iran over the weekend. Those strikes effectively brought oil flows through Hormuz to a halt, rattling energy markets worldwide. Global benchmark Brent crude briefly eased near $80 a barrel after Trump’s post, though traders remain cautious about how quickly the situation can stabilize.
What the insurance program actually covers
The DFC, which typically works to mobilize private investment in developing economies, confirmed it would extend support to commercial shipping operators, shipowners and key maritime insurance providers. The goal is to reduce market disruptions and restore confidence in the flow of goods through the region.
Political risk insurance of this kind generally protects against losses stemming from war, civil unrest and other forms of political instability. However, the scope of what the DFC is prepared to cover in a live war zone raises significant questions. The agency has not previously offered this type of protection at anything close to this scale. The closest precedent came after Russia’s invasion of Ukraine, when the DFC provided political risk insurance for new investment projects, not active commercial operations.
Analysts note that the premiums the DFC sets will speak volumes about how seriously the U.S. government views the ongoing threat. If private companies rush to buy the coverage, it could signal growing confidence that the conflict is winding down. If uptake is slow, it may reflect deeper uncertainty about the path forward.
Hormuz flows may take weeks to recover
Even with escorts and insurance in place, energy analysts warn that a swift return to normal shipping volumes through Hormuz is unlikely. Iran retains the capacity to deploy mines, anti-ship missiles and drone attacks against vessels in the waterway, and those capabilities will need to be substantially degraded before commercial traffic resumes at scale. Experts suggest the process could take weeks rather than days, even under the most optimistic scenarios.
Meanwhile, the broader conflict is already sending ripples across the region. Saudi Arabia confirmed that the U.S. Embassy compound in Riyadh, which includes a CIA station, was struck by two drones. Saudi defense forces later intercepted two cruise missiles and destroyed nine additional drones that had entered the kingdom’s airspace. The U.S. also issued a missile threat warning for the Dhahran area, home to a consulate and located near some of the world’s largest oil production fields.
Gasoline prices add pressure at home
Back in the United States, the political stakes are rising alongside pump prices. Gasoline has already climbed to its highest point in five months, a development that carries real electoral consequences with midterm elections approaching. The administration is keenly aware that energy costs hitting consumers directly tend to translate quickly into political headwinds.
Some of the world’s largest maritime insurance firms had already begun pulling war risk coverage for ships entering the Persian Gulf before Trump’s announcement, adding further upward pressure to oil prices. The DFC’s entry into the market is an attempt to fill that gap, though whether it can do so at a meaningful scale before the conflict concludes remains an open and urgent question.
