By Evie Liu

The Trump administration on Friday announced a $20 billion reinsurance program for oil tankers and other commercial ships in the Persian Gulf region.

The U.S. International Development Finance Corporation said it expects the program, which includes war risk, to "restore confidence in maritime trade" and "help stabilize international commerce" during the war.

It's the latest bid from the White House to restart maritime traffic through the Strait of Hormuz, a critical artery for global energy supplies. The Strait is the most important oil chokepoint in the world. Roughly 20% of the world's oil moves through the narrow waterway each day. The passage is also a critical route for natural gas, carrying about one-fifth of global liquefied natural gas exports.

Traffic in the region has been brought to a standstill since the U.S.-Iran War began, leading to concerns about the global supply of oil.

Operators are reluctant to pass through the region where Iran's Revolutionary Guard Corps has effectively shut down the Strait by vowing to attack tankers. Iran has claimed responsibility for an attack on a U.S. tanker in the Gulf. Many ship insurers have paused coverage or hiked rates to unaffordable levels.

President Donald Trump announced this insurance plan earlier this week, but didn't provide details at the time. In the same post, he said the U.S. Navy will escort oil tankers through the Strait, if necessary.

The administration is confident it can solve the crisis. DFC Chief Executive Ben Black said on Friday that the reinsurance plan "will get oil, gasoline, LNG, jet fuel, and fertilizer through the Strait of Hormuz and flowing again to the world." Trump promised to ensure the free flow of energy in the area, "no matter what."

But the plan didn't stop U.S. crude prices from topping $90 a barrel on Friday, their highest levels since 2023. West Texas Intermediate futures have jumped more than 35% since the beginning of the war.

And because they can't ship the oil through the Strait, Gulf nations have cut oil production.

That's all led to higher prices at the pump. The average price of a gallon of gas in the U.S. has increased by 34 cents over the past week, according to AAA.

Write to Evie Liu at evie.liu@barrons.com

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March 06, 2026 16:34 ET (21:34 GMT)

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