Tankers travel in the Gulf near the Strait of Hormuz, as seen from northern Ras Al-Khaimah, near the border with Musandam Governorate of Oman, amid the US-Israeli conflict with Iran on March 11, 2026 in the United Arab Emirates.
Stringer | Reuters
The insurance giant Chubb It will be the lead underwriter of a US government-led program to provide insurance for ships making hazardous shipments through the Strait of Hormuz.
Chubb will work with the US International Development Finance Corporation as part of a $20 billion plan to help get oil tankers and other commercial traffic moving again amid the dangers of an Iran war, the agency said.
Oil prices have risen Since the war began in late February. Brent crude traded above $91 a barrel on Wednesday afternoon. Oil prices remained relatively high despite Wednesday’s announcement that the International Energy Agency would coordinate the release of 400 million barrels from its member countries’ strategic petroleum reserves.
Fatih Birol, head of the IEA, said that in normal times the strait passes 15 million barrels of oil and 5 million of other oil products. Even as companies and governments scramble to ease the pressure, that flow has stalled.
A ship’s crew is reluctant to use the passage for fear of being attacked. Three ships were hit by missiles off the coast of Iran on Wednesday, the UK’s Maritime Trade Operations Center said on Wednesday.
The strait connects the Persian Gulf to the Arabian Sea, making the narrow passage along Iran’s southern coast the only sea route from the oil-rich region.
“Commerce passing through the Strait of Hormuz plays a vital role in the global economy, and providing insurance coverage to vessels is essential to resuming the flow of trade,” Chubb President and CEO Evan Greenberg said in a statement.
The company is “a focal point for all information on ships and cargo and working with us to facilitate this insurance,” a DFC official said on condition of anonymity.
“At the end of the day, DFC doesn’t have actuaries ourselves. We don’t have the staff to be the focal point for the market,” the official said.
The DFC program provides reinsurance — or secondary insurance to insurance companies — to cover about $20 billion in losses on a rolling basis. Chubb provides ultimate insurance to shippers. DFC can work with more companies besides Chubb, the firm said.
There is some confusion about the scope of DFC coverage, which narrowly targets potential war-related costs to eligible ships. This includes hulls, machinery and cargo. Analysts said ships would need coverage for the environmental costs of cleaning up after oil spills.
The official said the scope of the DFC includes environmental damage. “We’re providing coverage baked into that hull and machinery product.”
Ultimately preventing ships from moving is the raw danger of being near a war zone. Insurance can help at a high level, but ships won’t move if crews fear for their lives.
President Donald Trump, who has said the Iran war will be short, warned on Tuesday that it would be “twenty times harder” if Iran tries to stop shipping through the Strait of Hormuz. Earlier this week, speaking to CBS News about the strait, Trump said he was “thinking about taking it.”
The best case scenario for oil prices is an end to the conflict, but only if the US can’t help by providing military escorts for ships through the strait.
“The physical insurance that only the U.S. military can provide and the financial risk that insurance provides need to go hand in hand,” said Rachel Zimba, senior adviser at Horizon Engage, a political-risk consulting firm.
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