President Donald Trump said damage to ships and cargo would be paid for by Iranian funds frozen by the U.S. after attacks on oil tankers in the Red Sea by Yemen’s Houthis put shipping companies on alert.
In a social media post Thursday, the president said, “from this point forth, any and all damages done to Ships, Cargo, or anything related thereto, will be paid for by Iranian Money that the United States has in its possession, and controls. These damages may be very substantial but, nevertheless, this is the fair and equitable thing to do.”
President Trump said earlier in the day that the U.S. would hold Iran responsible in the event of another Houthi attack on shipping.
The U.S. Treasury Department has frozen Iranian assets and imposed sweeping sanctions targeting Iran’s military, oil exports and financial networks as part of the Trump administration’s “Economic Fury” campaign.
Trump did not specify how much Iranian money the U.S. currently controls or explain the legal authority under which the funds would be used to compensate shipowners or cargo interests.
The White House has not provided details on how compensation would be calculated or distributed. It was not immediately clear whether the administration plans to establish a formal claims process or seek congressional approval for using the funds.
The Iran-aligned Houthis opened a second front on maritime shipping upon warning shipowners that they would put up a blockade against Saudi vessels, as well as all ships traveling to Saudi ports.
Despite the attack, traffic through the Bab el-Mandeb Strait increased Thursday to 49 confirmed transits, according to commodity market intelligence platform Kpler, up from 43 the day prior.
“Several ships that had previously reversed course in the Gulf of Aden and Red Sea completed their crossings, while others remain on hold following earlier U turns,” said Kpler in a post on X. “The data points to a cautious but selective return to transit activity as operators continue to assess security conditions.”
The insurance costs to ship goods through the southern Red Sea doubled for some companies on Thursday after the Houthi attack, according to a report from Reuters.
War-risk insurance premiums for transits through the area rose to over 1 percent of the value of a ship from around 0.75 percent on Tuesday and 0.3 percent last week before the Houthi announcement. Rates for some Saudi-linked ships, as well as shipping companies calling at Saudi ports, were quoted as high as 3 percent for voyages from southern Saudi ports in the Red Sea.
Rates for Saudi ports including such as Jeddah and Yanbu, which are further north up the coast and closer to the Suez Canal, were quoted around 0.1 percent reflecting a lower risk profile for the moment.
War-risk insurance premiums first escalated when the Yemeni group began targeting commercial shipping in the Red Sea in late 2023.
The heightened focus on Red Sea security also comes as the U.S. and its allies seek to address ongoing disruptions in the Strait of Hormuz.
The U.S. and U.K. are planning to a high-level meeting in London next week that will focus on a potential international coalition to protect maritime shipping in the waterway, according to an Axios report Friday morning. The itinerary and date are still under discussion and haven’t been finalized, the report said.
Traffic through the strait remains bottlenecked, with Kpler indicating six vessels passed through on Thursday, down from Wednesday’s 15 ships.
According to a Monday report from Bloomberg, Sinokor Group, the world’s largest owner of supertankers, offered six months of extra salary to seafarers that were willing to sail through the Strait of Hormuz. The month-long voyage would involve picking up oil from either Saudi Arabia or Iraq and unloading it in the Gulf of Oman.
The International Maritime Organization says there are still roughly 6,000 seafarers and around 500 ships moored in the Persian Gulf behind the strait.
“We’ve been taken to the limit,” said IMO Secretary-General Arsenio Dominguez in an address to the UN Security Council on Thursday. “Because one thing that we cannot replace is those essential cargoes and essential goods that either come from the regions where the conflicts are taking place or that are required for the communities in the countries that are at war.”
