U.S. Expands Hormuz Shipping Insurance to $40 Billion With Major Carriers

Key Details The U.S. International Development Finance Corp. has doubled its reinsurance guarantee commitment to $40 billion for ships transiting the Strait of Hormuz. Major insurers including AIG, Berkshire Hathaway, Travelers, Liberty Mutual, and others joined the initial program to provide an additional $20 billion in coverage alongside Chubb. Why It Matters The Strait of Hormuz handles roughly one-fifth of global oil and liquefied natural gas flows. Its effective closure due to Iranian threats and regional conflict has created energy market volatility and raised shipping costs significantly for carriers willing to take the route. The Challenge Despite U.S. assurances and expanded insurance backing, shippers remain hesitant. Crew safety concerns persist as Iran continues threatening vessels with drone attacks, missiles, and water mines. Insurance alone may not convince operators to resume regular operations through the waterway. What's Required Vessels must meet strict eligibility criteria to access the reinsurance facility. Applicants must provide vessel origin and destination details, beneficial ownership information, cargo owner data, and financing documentation for approval.