Strait of Hormuz, breaking news! The United States has taken action!

The U.S. suddenly takes action.

According to CCTV News, on April 4 local time, Iranian sources said that Iran has approved cargo ships transporting basic living supplies and humanitarian aid to pass through the Strait of Hormuz on their way to Iranian ports or ports in the Gulf of Oman. The report says that ships bound for Iranian ports, including those currently located in the Gulf of Oman, must coordinate with the authorities and comply with the established passage agreements before they can pass through the strait.

Just now, according to CCTV News, Iran said that two ports in Hormozgan Province were attacked. On April 4 local time, officials in Hormozgan Province, Iran, stated that the United States and Israel attacked the Jask port in the province that day, causing damage to a ship, with no casualties. In addition, the Leng’e port in the province was also attacked, leading to two cargo ships catching fire and one person being injured.

As shipping through the Strait of Hormuz faces disruption, the United States has further used financial tools to stabilize market confidence. On Friday, the U.S. government’s development finance institution, the U.S. International Development Finance Corporation (DFC), announced that the scale of its reinsurance support for shipping through the Strait of Hormuz has been increased to $40 billion (about RMB 275.3 billion). This marks a significant upgrade in the United States’ efforts to provide “financial escort” for the transport of Gulf energy.

However, some analysts point out that, in real terms, financial measures are more of a “buffer” rather than a fundamental solution. Only after tensions in the Middle East cool down could insurance premiums truly fall, and shipping activity through the Strait of Hormuz would gradually resume.

The U.S. has stepped in

On April 3, U.S. Eastern Time, the DFC announced that it increased the scale of its reinsurance support for shipping through the Strait of Hormuz to $40 billion, while also bringing additional large U.S. insurance institutions into the program.

According to a notice released by the DFC, this expansion of the reinsurance capacity adds a second phase of support on top of the reinsurance plan launched in March. Based on the $20 billion rolling underwriting capacity provided by the DFC, Chubb and multiple newly added leading U.S. insurance companies will jointly provide an additional $20 billion, bringing the total scale of the maritime reinsurance mechanism to $40 billion.

Chubb will serve as the lead underwriter to manage the reinsurance mechanism. Its specific responsibilities include setting pricing and underwriting terms, taking on risks, and issuing policies for eligible vessels and cargo. In addition, Chubb will be fully responsible for handling all claims.

According to the above announcement, the newly added reinsurance participants include Travelers, Liberty Mutual, Berkshire Hathaway (under Buffett), AIG, Starr, and CNA.

The DFC said these institutions have extensive experience in underwriting marine insurance and war risk coverage, which will help enhance the underwriting capacity of the entire mechanism and broaden market coverage.

The core logic of this arrangement is: through a government-backed reinsurance mechanism, share extreme risks with commercial insurance companies, thereby lowering insurance costs for shipowners and cargo owners and promoting the resumption of shipping.

Analysts say the DFC’s policy goals are very clear: restore confidence in shipping through the Strait of Hormuz.

According to the notice, ships participating in the reinsurance plan must provide detailed information, including the countries where the route starts and ends, vessel ownership, cargo ownership, financing banks, and more.

The DFC and its partner insurance institutions will jointly assess whether a given vessel is eligible to be covered under this maritime reinsurance mechanism, based on information collected from the applicants, the sanctions screening and due diligence process, and other relevant information that the DFC and its partners obtain, review, and determine.

This means the mechanism is not only a financial tool, but also has attributes of risk screening and compliance review.

How big of an impact?

The Strait of Hormuz carries roughly one-fifth of the world’s oil and liquefied natural gas transport, making it one of the world’s most critical energy chokepoints. But in the past several weeks, amid an escalation of conflict, the waterway has been close to a “de facto closure,” delivering a severe shock to global energy markets.

At present, disruptions to shipping through the Strait of Hormuz are triggering ripple effects across global markets: on the one hand, tight energy supply is pushing up international oil and gas prices, and multiple countries that depend on Middle East energy imports are being hit; on the other hand, in the United States, domestic gasoline prices have climbed back above $4 per gallon, intensifying inflation pressure and the burden on consumers.

Although the latest published maritime insurance coverage has been significantly strengthened, the market response remains cautious.

Shipping companies generally believe that the biggest problem right now is not insurance costs, but personnel safety risks. Iran still has the capability to pose threats such as drones, missiles, and mines, creating real safety hazards for shipping operations.

People from energy consulting organizations note that only after regional military threats clearly decline could insurance premiums truly drop, and shipping activity could fully resume.

In addition, this reinsurance plan currently does not include “hard security” measures such as military escort, which further limits its practical effectiveness.

This reinsurance expansion follows a clear path the U.S. has taken recently on the Strait of Hormuz issue: prioritize economic and financial tools rather than direct military intervention to ease market pressure.

However, in real terms, financial tools are more of a “buffer” than a fundamental solution. If safety risks have not been substantially reduced, even if insurance coverage doubles, it will be difficult to completely reverse the shipping halt.

As the conflict evolves and with the U.S.’s subsequent policies becoming clearer—such as whether to provide naval escort and whether to expand intervention—the actual effectiveness of this $40 billion “insurance barrier” still needs to be further verified by the market.

According to CCTV News, at a joint press conference after meeting Egyptian Foreign Minister Abdel Atti on April 3, Russia’s Foreign Minister Sergey Lavrov said that it is necessary to push for a ceasefire in the Persian Gulf region and launch negotiations, adding that some people are trying to undermine the prospects for negotiations on the Iran issue.

Lavrov emphasized that the United States should not talk idly about reopening the Strait of Hormuz, but should stop its military actions against Iran.

Egypt’s Foreign Minister said that Egypt and Russia will coordinate to prevent the conflict in the Persian Gulf from expanding, and that both sides have a shared interest in de-escalating the situation.

Layout: Liu Junyu

Proofreading: Gao Yuan