Will Trump’s shipping insurance plan work?

March 10, 2026

AI Summary

5 min read

The Strait of Hormuz, a narrow waterway connecting the Persian Gulf to the open ocean, has become a parking lot. More than a thousand vessels—oil tankers, gas carriers, container ships—are idling in the warm waters off Saudi Arabia, Bahrain, and Dubai. They are not moving because of the war with Iran, but the immediate bottleneck is not just missiles or naval seizures. It is insurance. The world's most boring financial product has turned into a trade terrorist, hijacking the market in oil, which briefly soared past $100 a barrel this week. President Trump has a plan to fix it, but the details are hazy, and the solution may depend on something far more unpredictable than a contract.

The Insurance Parking Lot

Rachel Ziemba, a fellow at the Center for a New American Security, describes the Persian Gulf as "a parking lot." The pathways that are normally bustling with vessels are now frozen. Ships are not moving because they fear attack or seizure by Iranian forces, but also because of a steep rise in the cost of political risk insurance—sometimes called war insurance. This is a special, supplemental policy that covers what standard marine insurance does not: being hit by a missile or detained by the Iranian Navy.

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What you'll learn

1 (00:00) **Introduction: The Persian Gulf Traffic Jam** - Hosts Darian Woods and Patty Hirsch set up the episode: over a thousand vessels are stuck in the Persian Gulf, creating a trade choke point at the Strait of Hormuz.
2 (00:41) **The Core Problem: Insurance as a "Trade Terrorist"** - The hosts identify war insurance as the key factor hijacking oil markets, which briefly spiked over $100/barrel.
3 (01:20) **The "Parking Lot" in the Persian Gulf** - Expert Rachel Ziemba describes the Gulf as a frozen "parking lot" of vessels.
4 (02:15) **The Cost of War Insurance** - Political risk consultant Maximilian Hess explains the dramatic price surge.
5 (03:08) **Disruption and the "Shadow Trade"** - The insurance crisis has created a level of disruption not seen since the 1970s oil embargo.
6 (04:07) **Trump's Plan: The DFC to the Rescue** - President Trump proposes using the U.S. International Development Finance Corporation (DFC) to offer war insurance at a "very reasonable price."
7 (05:23) **The $20 Billion Backstop** - The DFC is offering up to $20 billion in reinsurance to cover potential losses for American insurance companies.

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Show Notes

More than a thousand ships are stranded outside the Strait of Hormuz, bobbing in the water. A big reason? Insurance. War insurance premiums have skyrocketed since the war with Iran began. It’s an add-on that covers things regular insurance doesn’t, like missile strikes. And shippers don’t want to foot the bill or put their crews at risk. Cue the traffic jam.

On today’s show, how a critical trade chokepoint became the parking lot of the sea. And taking stock of President Trump’s plan to offer reinsurance to get these ships sailing again.

Related episodes:
How the 'shadow fleet' helps Russia skirt sanctions
Will Iran block the Strait of Hormuz?

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