US to insure ship losses in the Strait of Hormuz for up to $20 billion

The Donald Trump administration announced Friday, March 6, that it will launch a reinsurance program for oil tankers and other vessels - in an effort to restart traffic through the Strait of Hormuz, CNBC reports . The U.S. Department of Commerce's (DFC) Corporation for International Development will insure losses of up to $20 billion on a renewable basis.

"We are confident that our plan will allow oil, gasoline, LNG, jet fuel and fertilizer to flow back through the Strait of Hormuz and into global markets," DFC chief Ben Black said in a statement.

U.S. oil prices rose more than 12%, breaking the $90 per barrel mark, with the Brent Mark trading above $94 per barrel at one point.

Since the beginning of the US and Israeli military operation against Iran, several oil tankers have been attacked in the region. Now traffic in the Persian Gulf is virtually at a standstill. Not a single tanker passed through the Strait of Hormuz on Friday, and there are only nine empty supertankers left in the Persian Gulf, which can only accommodate Saudi Arabia's four-day production, Bloomberg points out . Some Gulf countries have started cutting production because they cannot export their oil.

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