Insurance giant Chubb will be the lead underwriter for a U.S.-government led program to provide insurance to ships making the risky transit through the Strait of Hormuz.
Chubb will work with the Development Finance Corporation as part of a $20 billion plan to help get oil tankers and other commercial traffic moving again amid risks from the Iran war, the agency said.
Oil prices have spiked since the war began at the end of February. Brent crude traded above $91 a barrel midmorning Wednesday. Oil prices have stayed relatively high despite an announcement Wednesday that the International Energy Agency would coordinate the release of 400 million barrels from its member countries’ strategic petroleum reserves.
In normal times the strait sees passage of 15 million barrels a day of oil and another 5 million in other oil products, IEA chief Fatih Birol said. That flow has stalled despite a scramble by companies and governments to relieve the pressure.
Ship crews are reluctant to use the route for fear they could be attacked. Three ships off Iran’s coast were struck by projectiles Wednesday, the U.K. Maritime Trade Operations center said Wednesday.
The strait connects the Persian Gulf to the Arabian Sea, making the narrow route along Iran’s southern coast the sole maritime route out of the oil-rich region.
Chubb set as main U.S. insurer for Persian Gulf shipping amid Iran war
