US Navy to Protect Ships in Middle East Amid Energy Supply Concerns
US President Donald Trump has declared that the US Navy will protect ships in the Middle East "if necessary" to address the energy supply challenges triggered by the conflict involving Iran.
Trump further stated that the government will offer "at a very reasonable price, political risk insurance and guarantees for ALL Maritime Trade, especially Energy, traveling through the Gulf."
He emphasized that his strategy "will ensure the FREE FLOW of ENERGY to the WORLD," although experts caution that these assurances may not fully alleviate the concerns of shipping companies operating in the region.
Context of Rising Oil Prices and Regional Tensions
The announcement was made on social media amid a surge in global oil and gas prices, raising worldwide concerns about the potential impact on consumer prices.
Since the US and Israel initiated their campaign over the weekend, oil prices have increased by 10%, reaching levels not seen since last June.
Approximately 20% of the world's oil and gas supply passes through the Strait of Hormuz, a narrow channel situated between Iran and the United Arab Emirates.
However, maritime traffic has been halted following multiple attacks on vessels in recent days. In response, some insurance providers have raised premiums for ships operating in the area.
Data from Lloyds List Intelligence indicates that around 200 crude oil and product tankers are currently stranded in the Gulf region.
US Government Response and Military Support
On Tuesday, Trump announced he had directed the United States Development Finance Corporation (DFC) to extend risk insurance to all shipping lines and pledged military escort "if necessary... as soon as possible."
Following this announcement, oil prices declined. The statement coincided with Trump's scheduled meetings with Energy Secretary Chris Wright and Treasury Secretary Scott Bessent to discuss measures addressing the energy situation.
Industry Perspectives on Safety and Insurance
Despite the president's assurances, Richard Meade, editor-in-chief of the shipping journal Lloyds List, expressed uncertainty about whether the US administration could effectively resolve the safety issues contributing to the supply disruption.
He referenced previous Houthi attacks on vessels in the Red Sea, which led many shipping companies to avoid that route in favor of longer, costlier alternatives, even with US military involvement.
"There was never really a point at which insurance alone would have prevented ships from going through the Strait of Hormuz,"
Meade said, adding,
"Just because you've got a naval escort doesn't mean to say you're safe."
Potential Economic Impact of Prolonged Disruption
Analysts warn that an extended interruption could push crude oil prices above $100 per barrel, significantly affecting petrol prices, including in the US, where substantial domestic production has historically mitigated the effects of global price fluctuations.
Trump's Defense of the Conflict and Price Outlook
Speaking to reporters at the White House on Tuesday, Trump defended the military action, stating,
"something had to be done" about the Iranian regime.
He acknowledged that the situation might cause elevated oil prices "for a little while" but downplayed the long-term consequences.
"As soon as this ends, those prices are going to drop, I believe lower than even before,"
he said.
