The US will provide reinsurance covering up to $20 billion in potential losses in the Gulf region to bolster confidence among oil and gas shippers during the conflict with Iran, reported Reuters citing the US International Development Finance Corporation.
US President Donald Trump has said the US navy will protect ships in the Middle East and the government will provide insurance "if necessary" in a bid to contain soaring energy prices sparked by the US-Israel war with Iran.
The effective closure of the Strait of Hormuz following the outbreak of the Iran conflict, is likely to be temporary given its vital economic role. This, alongside global oil market oversupply, should limit oil price rises and mitigate any potential disruptions to Iranian oil supply, said an industry expert.
An oil tanker sailed through the Strait of Hormuz on Tuesday, heading to a United Arab Emirates port to load crude in a rare voyage since the Iran war severely disrupted shipping in the Middle East, according to industry sources and ship-tracking data quoted by Reuters.
Iran’s Revolutionary Guard Corps (IRGC) declared that the Strait of Hormuz was “closed” and that any vessel attempting to pass through the waterway would be set “ablaze.”
Global oil and gas prices surged on Tuesday as the escalating U.S.-Israeli war with Iran disrupted energy exports from the Middle East, triggering supply fears and sending shockwaves through commodity markets.
The risk of an expanded Iran war grew as Yemen's Iran-aligned Houthis on Saturday launched their first attacks on Israel since the start of the conflict, as additional US forces reached the Middle East. The first of two contingents of Marines arrived on an amphibious assault ship.
Two LPG tankers, BW Elm and BW Tyr, are crossing the Strait of Hormuz to India. So far, four stranded Indian LPG cargoes—Shivalik, Nanda Devi, Pine Gas, and Jag Vasant—have been moved from the strait.
Weaponising the Strait of Hormuz is an act of economic terrorism with global impact far beyond energy markets, said Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, ADNOC Managing Director and Group CEO, Chairman of Masdar and Executive Chairman of XRG.
Aramco, the world's top oil exporter, has cut crude supply to Asian buyers for a second month in April, two sources with knowledge of the matter said, after the US-Israeli war with Iran disrupted trade via the Strait of Hormuz.
