U.S. Treasury Secretary Scott Bessent said this week that a US insurance program designed to boost shipping through the Strait of Hormuz will begin soon.
Bessent made the announcement during a meeting of President Donald Trump’s cabinet at the White House. The program, which Trump first announced on March 3, involves the US International Development Finance Corporation providing insurance guarantees with naval escorts to ensure safe passage for oil tankers and other vessels through the strait.
“The oil market is well-supplied. We’ve taken actions to ensure that oil supplies stranded at sea are made available to the global market,” Bessent said. “Your bold actions, like the Development Finance Corporation’s maritime reinsurance program, in conjunction with Central Command, will soon provide shippers through the Gulf region with a level of security we have never seen before.”
The strait serves as a chokepoint for roughly a fifth of global oil and gas flows. Despite the program’s announcement more than three weeks ago, no evidence has emerged that any vessels benefitting from the initiative have passed through the strait.
Bessent’s remarks came amid rising concern about oil and gas prices during the Iran war. Trump’s threat to hit power plants in Iran, which has since been postponed, prompted the Islamic Republic to vow it would close the Strait of Hormuz completely and target regional energy facilities in response.
On Wednesday, Trump said that as part of negotiations with Iran, the country made a gift. Today, the President clarified the remarks claiming that the gift was allowing 10 tankers of oil to pass through the strait.
Iran has declared Hormuz closed multiple times since the onset of the U.S.-Israel war against the country, essentially halting any ship movements through the world’s most important energy waterway.
Source: Investing.com
