The administration under U.S. President Donald Trump has unveiled a $20 bn reinsurance program intended to restore shipping activity in the strategically vital Strait of Hormuz, where maritime traffic has nearly halted following the US and Israeli attacks on Iran. The initiative was announced by the US International Development Finance Corp. (DFC) on 6th March 2026 and is designed to provide maritime reinsurance coverage in the Gulf region. According to the agency, the $20 bn reinsurance program will include protection against war-related risks and aims to stabilize commercial shipping flows. The facility is structured to insure losses up to approximately $20 bn “on a rolling basis,” with coverage currently limited to vessels.
The policy announcement follows remarks by President Donald Trump directing DFC to provide insurance “at a very reasonable price” to help safeguard the movement of energy supplies and other commercial cargo through the Gulf. The comments were made as oil prices surged and concerns grew that the availability of insurance was preventing vessels from entering the waterway. Several governments, including the US, had previously indicated that restricted insurance access was a significant barrier to transit. Trump also stated that the US military might provide escorts for ships traveling through the Strait, although no operational plans have been disclosed. Against this backdrop, the $20 bn reinsurance program is being positioned as a mechanism to restore confidence among shipowners and insurers operating in the region.
The Strait of Hormuz is one of the world’s most critical maritime corridors, carrying roughly one-fifth of global oil flows along with shipments of gas, fertilizer and other commodities. Tensions escalated after Iran warned that vessels attempting to cross the passage could face attacks, triggering a sharp rise in energy prices and increasing risk perceptions across global shipping markets. In a statement outlining implementation plans, the development agency said, “DFC and Treasury are coordinating closely with CENTCOM on next steps in the implementation of this plan,” referring to the US military’s central command. Officials said the $20 bn reinsurance program will operate with selected partners, noting that the DFC has already identified “best-in-class, preferred American insurance partners.”
Despite the heightened security risks, private insurance markets had continued offering coverage before the government initiative was announced. The Lloyd’s Market Association confirmed that premiums were still being quoted for ships considering passage through the Strait, while broker Arthur J. Gallagher & Co. stated that the London insurance market remained willing and capable of underwriting vessels navigating the route. Insurers have also expressed interest in cooperating with DFC on the new arrangement, according to an agency official. The structure of the $20 bn reinsurance program, the official added, reflects extensive consultations between the agency and the insurance sector as authorities attempt to restore stability to commercial shipping in the Gulf.
