U.S. launches $20B reinsurance program for Gulf shipping amid Iran tensions, targeting Strait of Hormuz risks.

The U.S. has launched a $20 billion reinsurance program through the Development Finance Corporation to restore confidence in maritime shipping through the Strait of Hormuz amid heightened tensions with Iran. The initiative, approved by President Donald Trump and coordinated with the Treasury Department and CENTCOM, provides war-risk coverage for hull and cargo insurance on a rolling basis, targeting oil, LNG, jet fuel, and fertilizer shipments. The program aims to stabilize global trade, though analysts question its effectiveness given security concerns and a significant gap between the program’s size and estimated needs. Reinsurers have tripled war-risk premiums, and some have canceled coverage, citing rising risks from regional conflict and a U.S. submarine strike off Sri Lanka that escalated maritime fears beyond the Middle East.