Price of insurance for ships passing through the Strait of Hormuz has jumped 12 times

The cost of insurance for ships passing through the Strait of Hormuz has jumped 12-fold, despite US President Donald Trump’s promise to ensure uninterrupted energy supplies from the Middle East, the Financial Times reports.

According to the publication’s sources, the rate for insuring ships operating in high-risk areas, which include not only the strait itself but also the waters adjacent to it, is now 3% of the value of the ship, while before the start of the US and Israeli military operation against Iran it was 0.25%.

The head of the White House previously wrote in Truth Social that he ordered the US Development Finance Corporation (DFC) to begin providing insurance and guarantees on favorable terms “for all commercial maritime transportation through the Persian Gulf, especially those related to energy resources.”

Insurers are trying to figure out how this will work and whether it will help reduce prices. Several brokers told the FT they were caught off guard by Trump’s announcement.

“We’ve heard absolutely nothing other than this announcement at Truth Social,” said David Smith of brokerage McGill, adding that insurers were unsure how widespread the support would be, despite a promise to insure “all” trade passing through the Gulf.

Other experts questioned how effective the DFC’s assistance, whose primary role is to promote private investment in poor countries, could be, while the threat of attack is a major concern for shipowners operating in the Gulf.

“We already have insurance,” said Ed Finley-Richardson, founder of Contango Research. The DFC announcement may have helped to contain the rise in oil prices, but it is unlikely to make a difference for us, he added.

At least seven tankers have been attacked in the Strait of Hormuz and surrounding waters since Sunday, with some vessels reporting receiving radio warnings to stay away from the strait.