In the context of escalating conflict between the US-Israel and Iran coalitions causing sea freight insurance premiums to skyrocket, President Trump has taken a drastic step to stop the rise in energy prices.
On March 3, President Trump directed the US International Development Finance Corporation (DFC) to provide political risk insurance packages and financial guarantees for maritime trade activities in the Gulf region. This move is to support ship owners when private insurance companies begin to withdraw or push costs to uncontrollable levels.
Whatever happens, the United States will ensure free energy flow for the world," President Trump affirmed on social media. He also added that Americans may have to accept high oil prices for a short time, but he believes prices will fall deeper than before as soon as the conflict ends.
Currently, the oil flow through the Strait of Hormuz - the artery that transports 20% of the world's oil - is almost frozen. Many oil tankers have been damaged after raids or are trapped in the war zone.
To resolve the situation, the US Navy can deploy a fleet of 12 warships, including aircraft carriers currently present in the area, to carry out escort missions.
However, experts warn that this is a risky mission as these ships must both operate against Iran and protect commercial ships from enemy missiles and armed boats.
Although financial and military measures have been launched, analysts are still skeptical about the possibility of immediately cooling down oil prices. Mr. Rohit Rathod, an expert from the ship monitoring company Vortexa, said that attacks may still continue and insurance premiums will remain high.
Meanwhile, Treasury Secretary Scott Bessent and Energy Secretary Chris Wright are urgently submitting to the President a list of additional options, including the possibility of releasing strategic oil reserves (SPR) if fuel prices continue to rise, threatening the Republican Party's advantage in the midterm elections in November.
