2 hours ago
1
Natalie ShermanBusiness reporter
AFP via Getty Images
US President Donald Trump has said the country's navy will protect ships in the Middle East "if necessary" in a bid to stop the energy supply crunch sparked by the war with Iran.
Trump added that the government will provide "at a very reasonable price, political risk insurance and guarantees for ALL Maritime Trade, especially Energy, traveling through the Gulf".
He said his plan "will ensure the FREE FLOW of ENERGY to the WORLD".
Oil has jumped 10% since the US and Israel launched their campaign over the weekend, reaching the highest level since last June.
A fifth of the world's oil and gas flows through the Strait of Hormuz, a narrow waterway wedged between between Iran and the United Arab Emirates.
But traffic has come to a halt after several vessels were attacked in recent days, while insurance companies said they were cancelling risk policies for ships in the region.
Roughly 200 crude oil and product tankers are now stranded in the Gulf region, according to data from Lloyds List Intelligence.
Trump on Tuesday said he had ordered the United States Development Finance Corporation (DFC) to provide the risk insurance to all shipping lines, promising "more actions to come".
Oil prices dropped back after the announcement.
Speaking to reporters at the White House on Tuesday, Trump defended the war, saying "something had to be done" about the Iranian regime.
He conceded it might lead to high oil prices "for a little while" but brushed off long-term impact.
"As soon as this ends, those prices are going to drop, I believe lower than even before," he said.
Analysts have warned that a prolonged disruption could send crude oil prices above $100 a barrel, which would have a major impact on petrol prices, even in the US, where significant domestic production has tended to mute the impact of global price movements.
Trump was due to meet with Energy Secretary Chris Wright and Treasury Secretary Scott Bessent to discuss plans to address the energy issues.
