On March 9, 2026, in Muscat, Oman, the tanker Luojiashan is anchored in Muscat amid the US and Israel’s standoff with Iran, which has vowed to close the Strait of Hormuz.
Benoît Tessier | Reuters
Insurers, brokers and shipping companies around the world fear an environmental catastrophe if an oil tanker sinks in the Persian Gulf.
That’s a big risk in a region that stretches from Kuwait to Qatar and is home to glittering skyscrapers, luxury seaside resorts and booming commercial centers. Its staggering wealth and shift toward tourism are a dramatic change from the late 1980s, when a tanker war between Iraq and Iran threatened the Persian Gulf oil trade.
What the region doesn’t have is the kind of advanced oil cleanup industry and technology readily available in the United States, said a risk adviser who asked not to be named.
This high-cost pollution risk has not yet been addressed by global insurance markets, which do not have the data to calculate business interruption claims if a major oil spill contaminates a destination coast.
Pollution is provided under marine insurance, which also includes hull, machinery and cargo cover.
expensive compensation
Hull, machinery and cargo coverage continues to be provided to shipping companies even after missile flights begin. But it was expensive – 4-6 times as much as the previous week, according to marsh and Howden Group, two major global insurance brokers.
Still, sources told CNBC that President Trump’s promise to insure tankers and facilitate trade has reassured the market that the U.S. government will provide adequate support.
But the Development Finance Corporation’s planned $20 billion reinsurance scheme is so far intended only as a backstop for ships, machinery and cargo, with no mention of crucial pollution coverage.
DFC told CNBC on Monday that more details about the program would be announced soon.
But in the meantime, contamination risks and possible business shutdowns are considered unknown or uninsurable risks, similar to those faced by the United States in the aftermath of the September 11 attacks. The government then stepped in with the creation of TRIA (Terrorism Risk Insurance Act) in 2002 to help insurance companies manage the devastating risk of terrorism.
Without such a backstop against environmental risks, a kind of quagmire will continue to hamper Persian Gulf trade, officials said.
