Cheap insurance to crush Iran's oil chokehold, US Navy to begin escorting oil tankers in Hormuz, 'if necessary': Trump

Amid surging energy prices and private insurers withdrawing coverage, US President Donald Trump ordered the International Development Finance Corporation (DFC) to immediately offer affordable political risk insurance and guarantees for all maritime trade, particularly energy shipments, through the Gulf — available to any shipping line.

"If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible," Trump stated in a social media post.

Iran has kept a chokehold on the strategic Strait of Hormuz which has sent the global energy market on a tailspin, and oil prices soaring.

Brent crude rose to $81.40, up $3.66 (4.71%) as of 00.09 GMT, while WTI hit $74.72, after having already risen 25% since the beginning of the year as tensions with Iran have escalated.

Crude prices jumped 6% March 2, but they prices may spike siginificantly if oil isn’t flowing soon.

Attacks by Iran's Islamic Republican Guard Corps on vessels have disrupted the Strait of Hormuz, a critical chokepoint for 20% of global oil flows.

Trump said in a social media post that the US Navy would escort tankers if needed, ensuring the "free flow of energy to the world".

This move comes as Iran has effectively blockaded the strait following US strikes, spiking oil prices and threatening global supply chains, as per The Hill.

Leveraging DFC

By leveraging DFC — typically focused on development finance — Trump expands its role into crisis intervention, aiming to stabilise markets and deter further aggression, according to Business Insider.

Supporters of Trump's insurance move hail it as decisive leadership while critics, however, decry it as reckless, potentially risking direct naval clashes and taxpayer-funded bailouts for oil giants, with others expressing outrage over federal involvement.

Lowering shipping costs

The policy could lower shipping costs, prevent inflation spikes, and reinforce US dominance in energy security, but it raises questions about DFC's mandate stretch and long-term fiscal impacts, according to the think-tank ICIS.

With "more actions to come," this signals Trump's aggressive foreign policy revival, blending economic tools with military might to counter Iran amid ongoing conflict.

The US International Development Finance Corporation (DFC) is America's development finance institution, established in 2019 during Trump's first term through the bipartisan BUILD Act, which merged the Overseas Private Investment Corporation (OPIC) with USAID's Development Credit Authority (DCA), as per US Congress.

Its core mission: to partner with the private sector to finance projects in developing countries, advancing US foreign policy, national security, and economic interests while providing alternatives to authoritarian investments like China's Belt and Road Initiative.

DFC's mandate

DFC offers loans, equity investments, political risk insurance, and guarantees, prioritising low- and lower-middle-income nations, with a focus on sectors like energy, infrastructure, and technology, according to the Milken Institute.

By FY2024, DFC had committed $12 billion across 181 projects in 44 economies, growing its portfolio to nearly $49 billion by FY2025.

In December 2025, Congress reauthorised DFC through 2031 via the FY2026 National Defence Authorisation Act (DAA), tripling its maximum contingent liability to $205 billion and expanding authorities for equity use and new priorities like nuclear energy, AI, drones, and Ukraine reconstruction.

This evolution positions DFC as a key tool for US strategic competition, with a FY2026 budget request of $3.8 billion reflecting its amplified role, accorind to the Center of Strategic and International Studies (CSIS).