Insurance Plan Aims to Keep Oil Shipping Safe Amid Gulf Tensions

A new U. S. insurance program is stepping in to help ships travel through the Strait of Hormuz, a key route that connects Persian Gulf oil fields with the wider world. The plan is led by Chubb, a large insurer, and works with the Development Finance Corporation to cover potential damage from war‑related incidents. The initiative is part of a $20 billion effort to keep oil tankers and other commercial vessels moving when tensions with Iran rise. Oil prices have climbed sharply since the conflict began, and the flow of crude through the strait has slowed. Normally about 15 million barrels a day move through this narrow waterway, but recent attacks on ships and the threat of further violence have made crews hesitant. Even with a global release of 400 million barrels from strategic reserves, the market remains tight.Chubb’s role is to gather information on ships and cargo, then provide final insurance coverage. The Development Finance Corporation supplies reinsurance—secondary protection—for up to $20 billion in damages, while Chubb offers the primary policy. The coverage focuses on war‑related losses to hulls, machinery and cargo, and includes environmental protection for potential oil spills. Despite the insurance, many crews still fear the danger of operating near a war zone. Military escorting could complement financial protection, but the decision to sail depends largely on whether crews feel safe. The U. S. has signaled it could provide such escorting, but the ultimate goal remains to keep oil flowing without exposing vessels to unnecessary risk.