Donald Trump, the United States president has promised financial and military protection for ships travelling through the Gulf following threats of attack on tankers by Iran.
“Effective immediately, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of all Maritime Trade, especially Energy, travelling through the Gulf,” Trump wrote on Tuesday on his Truth Social. “This will be available to all Shipping Lines,” he added.
He said the United States Navy will begin escorting tankers through the highly volatile Strait of Hormuz “if necessary.” Following missile attacks on its territory, Iran’s Revolutionary Guard declared the Strait of Hormuz closed, threatening to target any vessel attempting to pass. The waterway carries about 20 percent of global oil and gas supply. But the US is undeterred.
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“No matter what, the United States will ensure the free flow of energy to the world,” trump wrote.
Recent attacks have caused costly disruption in oil and commodity trade. Tanker traffic ground to a near-halt, according to vortex data, which showed crude tanker transits falling from an average of 24 per day to just 4 on March 1.
Major shipping lines were forced to suspend operations along the Straits, and asked ships to reroute to safer areas, raising bunker prices and freigh rates.
Meanwhile, Brent crude jumped approximately 10 percent on March 2, breaching $82 per barrel. Prices have risen from roughly $67–$73 per barrel just before the conflict to over $82 in early March trading.
Natural gas prices saw even more dramatic increases, with European benchmark prices soaring by 38 to 50 percent on Monday. Analysts warn that if the conflict is prolonged or energy infrastructure is further damaged, oil prices could surpass $100 per barrel.
