WASHINGTON (dpa-AFX) - Amid spiraling oil prices due to the Iran war, President Donald Trump said the U.S. Navy would provide escorts to oil tankers and other vessels to sail safe through the Strait of Hormuz.
He also pledged insurance guarantees for maritime trade in the Gulf in a social media post just after midnight.
'Effective immediately, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf,' he wrote on Truth Social.' This will be available to all Shipping Lines. If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible,' he added on his social media platform.
Trump promised that the United States will ensure the free flow of energy to the world, claiming that the United States' 'economic and military might is the greatest on earth'.
It is not clear if shipping companies are willing to sail through the risky Strait of Hormuz just on the basis of Trump's assurance of offering insurance protection through the DFC.
He had told reporters Tuesday that Americans may have to live with higher oil prices briefly, 'but as soon as this ends, those prices are going to drop, I believe, lower than even before.'
Oil prices surged more than 10 percent since the United States and Israel launched military attacks on Iran Saturday, and Iran retaliated with strikes targeting Israeli and U.S. military installations in the Gulf region and its Middle East allies.
Crude price is likely to increase further over concerns of increasing disruptions in the global energy supply chain due to the escalating hostilities.
A number of ships were attacked near the Strait of Hormuz, triggering tanker rates and insurance costs to surge, reports say.
Vessel traffic plunged through the vital trade route due to the threat of more Iranian attacks on ships transiting the region.
Earlier, Iranian navy had declared the Strait is closed.
20 percent of the world's liquefied natural gas and 25 percent of seaborne oil pass through the Strait of Hormuz, the narrow waterway leading to the Persian Gulf.
Oil could top $100 if transit through the Strait of Hormuz doesn't return to normalcy quickly, reports quoting energy expert say.
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