Trump Taps Obscure Agency to Insure Ships in Persian Gulf

The U.S. International Development Finance Corporation will provide political risk insurance to shipping lines amid escalating conflict in the region.

Published on Mar. 4, 2026

Got story updates? Submit your updates here. ›

As concerns over the global oil supply intensify, President Trump has pledged that the little-known U.S. International Development Finance Corporation (DFC) will step in to insure ships sailing through the Persian Gulf. The DFC, which typically focuses on funding development projects in low-income countries, will now provide political risk insurance to "all shipping lines" operating in the region as the Iran war continues.

Why it matters

This move represents a significant departure for the DFC, which has historically backed economic growth projects in poor countries, not insured commercial shipping activity. Experts warn that this could expose American taxpayers to potentially massive payouts if ships are damaged, raising concerns about the agency overstepping its original mandate.

The details

The decision comes as other global insurers have backed away from underwriting maritime trade activity in the Gulf amid concerns that vessels could become collateral damage in the Iran war. The DFC said it is "ready to mobilize its political risk insurance and guaranty products to stabilize international commerce and support American and allied businesses operating in the Middle East during this period of conflict with the Iranian regime." However, it's unclear whether the insurance will extend solely to the U.S. fleet or include ships flying under other countries' flags.

  • On March 4, 2026, President Trump announced the DFC would provide political risk insurance to ships in the Persian Gulf.
  • In recent days, other global insurers such as NorthStandard, the London P&I Club, and the American Club have issued notices suspending insurance for ships traveling through Iranian waters and the Gulf due to escalating risks from the war.

The players

U.S. International Development Finance Corporation (DFC)

A government agency established in 2019 to back global investment projects, typically focused on funding development in low-income countries.

President Trump

Announced that the DFC will provide political risk insurance to "all shipping lines" operating in the Persian Gulf.

Scott Bessent

U.S. Treasury Secretary, stated that the DFC CEO has been preparing a contingency plan for "months" to support commercial shipping in the Middle East.

Joaquin Castro

Texas Representative, raised concerns that the U.S. may be "subsidizing and protecting oil shipments to China" through the DFC's insurance program.

Clemence Landers

Vice President and Senior Policy Fellow at the Center for Global Development, a nonprofit think tank focused on international development.

Got photos? Submit your photos here. ›

What they’re saying

“We will be moving out to the ship owners, to the insurance brokers, over the coming days.”

— Scott Bessent, U.S. Treasury Secretary (CNBC)

“This certainly looks like the United States will be subsidizing and protecting oil shipments to China.”

— Joaquin Castro, Texas Representative (X)

What’s next

The DFC said it is prepared to provide political risk insurance to commercial shipping charterers, shipowners and maritime insurance companies to minimize market disruptions in the Persian Gulf. The agency declined to comment on the specific costs or scope of the insurance program.

The takeaway

The DFC's foray into insuring commercial shipping activity in the Persian Gulf represents a significant shift from its traditional focus on development projects in low-income countries. This move raises concerns about the agency overstepping its mandate and potentially exposing American taxpayers to substantial financial liabilities if ships are damaged in the ongoing Iran conflict.