The United States announced on Friday a 20-billion-U.S.-dollar reinsurance plan to cover the maritime losses for vessels in the Gulf region, as insurance costs surged around the Strait of Hormuz amid escalating Middle East tensions.
The announcement followed an order by U.S. President Donald Trump directing the U.S. International Development Finance Corporation (DFC) to provide so-called political risk insurance and guarantees for maritime trade, especially energy, "traveling through the Gulf."
The announcement said the DFC facility will insure losses on a rolling basis, covering maritime risks including war risk, to ensure key commodities such as oil, gasoline and liquefied natural gas (LNG) continue to flow through the Strait of Hormuz to global markets.
Nestled between the Gulf and the Gulf of Oman, the Strait of Hormuz serves as the only sea passage from the Gulf to the open ocean, cementing its status as one of the world's most strategically vital chokepoints.
Reinsurance covers insurance companies against losses. As tensions rise in the Middle East, war risk insurance rates in the Gulf region have surged. Many commercial insurers have withdrawn war risk coverage for vessels operating in Iranian waters, as well as in the Gulf and adjacent waters.
JPMorgan Chase estimates that tankers traversing the region may require more than 300 billion U.S. dollars in insurance coverage, far exceeding the 20 billion U.S. dollars pledged by the U.S. government.
US to cover Gulf maritime losses with 20 bln USD
Trade volume between China and Russia surged 19.7 percent year on year to reach 85.2 billion U.S. dollars during the January-April period, marking a good start to this year, the Chinese Ministry of Commerce said on Thursday.
He Yadong, spokesman for the commerce ministry, said at a regular press briefing that the annual trade between the two countries has exceeded 200 billion U.S. dollars for three consecutive years.
The ministry and relevant Russian authorities have signed cooperation documents on trade and support for multilateralism, He said.
The spokesman said the two sides will continue to strengthen communication on economic and trade policies, leverage new quality productive forces to create fresh engines for growth, and upgrade trade in goods and services.
"The annual trade volume between China and Russia has exceeded 200 billion U.S. dollars for three consecutive years. Trade between the two countries got off to a good start this year as the trade volume during the January-April period reached 85.2 billion U.S. dollars, up 19.7 percent year on year. As the upgraded China-Russia agreement on promotion and reciprocal protection of investments has officially come into effect, investment and cooperation in industrial and supply chains between the two countries are set to see continuous improvements with deepening sub-national cooperation. Not long ago, the two heads of state sent congratulatory letters to the 10th China-Russia Expo, fully demonstrating their deep expectations for strengthening local cooperation between the two countries," He said.
"Next, the commerce ministry will earnestly implement the important consensus reached by the two heads of state, and work to improve and upgrade bilateral economic and trade cooperation to lay a solid foundation for the development of the China-Russia comprehensive strategic partnership of coordination for the new era. The two sides will also enhance mutual collaboration in multilateral and regional cooperation, jointly contributing to safeguarding a fair and reasonable international economic order," He said.
China-Russia trade up 19.7 pct in Jan-April
