By Captain John Konrad (Opinion) – The Strait of Hormuz is twenty-one
miles wide. Two shipping channels, each two miles across, separated by a
two-mile buffer. There is no alternative. Saudi Arabia’s East-West
Pipeline to Yanbu and the UAE’s pipeline to Fujairah can handle maybe
five million barrels combined. The math doesn’t work. The bottleneck is
not political. It is geological and hydrographic.
Every TV analyst in America is talking about minesweepers and carrier
strike groups. They are asking the wrong questions. The binding
constraint on Hormuz was never a minefield or insurance. It is the US
Navy’s willingness and ability to reopen it.
Every talking point suggests the White House and Navy are working
hard to reopen the strait but progress is slow. A new posts on Truth
Social suggests we may have to considet a new hypothesis.
“I wonder what would happen if we “finished off” what’s left of the
Iranian Terror State, and let the Countries that use it, we don’t, be
responsible for the so called Strait?” wrote President Trump in a psot this morning. “That would get some of our non-responsive “Allies” in gear, and fast!!!”
Which leads to a question, White House may have no intention of reopening the Strait of Hormuz?
The Insurance Kill Switch
When the seven P&I clubs belonging to the International Group issued 72-hour cancellation notices for war risk coverage in the Persian Gulf on March 5, they did not just raise costs. They made transit impossible.P&I clubs insure roughly 90 percent of the world’s ocean-going
tonnage. Without their coverage, ships cannot sail. Port authorities
will not let them dock. Banks will not finance the cargo. Charterers
will not book the vessel. The entire system, from loading berth to
discharge terminal, is underwritten by a chain of contracts that begins
with a club in London, Oslo, or Tokyo. When the clubs pulled war risk
extensions, that chain broke. Not for a few ships. For the global fleet.
War risk premiums jumped from 0.25 percent to 1 percent of hull
value, renewable every seven days. VLCC charter rates quadrupled to
nearly $800,000 per day. Over 1,000 vessels are now trapped in the
Persian Gulf, burning charter costs with nowhere to go. By March 3, only
four ships crossed the Strait, down from a seven-day average of
seventy-seven.
Then Trump did something that almost nobody in the press understood.
He ordered the U.S. International Development Finance Corporation to create a $20 billion maritime reinsurance facility,
with Chubb as lead underwriter, making the United States government the
insurer of last resort for Gulf shipping. A sovereign nation positioned
itself as the backstop for war risk insurance on the world’s most
critical maritime chokepoint. The DFC facility, coordinated with US
Central Command and Treasury, offers hull, machinery, and cargo coverage
on a rolling basis to eligible vessels.
The United States now controls the on/off switch for the Strait of Hormuz. Not through naval firepower. Through insurance.
Read the latest MARAD advisory
carefully: U.S.-flagged, owned, or crewed commercial vessels operating
in these areas should maintain a minimum standoff of 30 nautical miles
from U.S. military vessels.
And read this part of the DFC announcement again… “coordinated with US Central Command.”
They cannot pass without the Navy permission.
The green light has not appeared.
The Maritime Dream Team That Was
To understand why this matters, you need to understand what Trump built and what was destroyed.Trump came into his second term determined to restore American
maritime power. He assembled the greatest collection of maritime minds
in key government positions since Nixon. He put Mike Waltz, creator of
the SHIPS for America Act, as head of the National Security Council. He created a Maritime Office in the White House.
He appointed maritime advocates to key positions throughout the
administration. He signed a sweeping Maritime Executive Order in April
2025 directing a Maritime Action Plan across Defense, State, Transportation, and Homeland Security.
He started targeting chokepoints: Panama, the Red Sea, Suez, the
Greenland-UK Gap. He launched investigations into Gibraltar and Spain.
He created USTR actions to tariff Chinese-built and operated ships. He
called CMA CGM’s CEO Rodolphe Saadé to the Oval Office and secured a $20 billion commitment to American maritime investment.
The ambition was real.
So was the pushback.
Shipowners lined up outside USTR to protest the China shipping
tariffs. Nearly every economist on the planet lined up against the
maritime tariff proposals. The entire U.S. tech sector asked for China
concessions, and what did China want in return? A pause to USTR.
Then Signalgate. The media leaked a private conversation about
attacking the Houthis and reopening the Red Sea. The operation was
stunned. Signalgate forced a reorganization. Waltz was moved to the UN.
The Maritime Office was downsized. The NSC was gutted.
That was the moment every maritime initiative began to stall.
What collapsed: Panama did not follow through on free transits for
U.S. ships. CMA CGM’s $20 billion commitment evaporated as the company
ordered vessels from China and India instead. Congress stalled on the
SHIPS Act. The UK traded the Chagos Islands, including Diego Garcia, to
Mauritius for a sweetheart deal, putting a critical naval base at risk.
Key Navy appointees were slow-rolled or blocked in the Senate.
Then it came to a head at the International Maritime Organization in
London. In April 2025, sixty-three countries voted to approve the
Net-Zero Framework, a global carbon pricing mechanism on every ship over
5,000 tons. What did Trump’s negotiators ask for? That America’s tiny
fleet of merchant ships be exempt. Europe refused, claiming American
maritime interests are “irrelevant” and that we lack the leverage or
votes.
The U.S. walked out. In October, at the adoption vote, Trump called it a “Global Green New Scam Tax on Shipping.” Trump played hardball. The State Department threatened sanctions against any country that voted yes. Fifty-seven countries voted to delay.
A pyrrhic victory. The carbon tax was dead in the water, but we did
not get exemptions for U.S. ships, and the White House began losing the
wider war for chokepoints and maritime trade with the City of London,
Europe and China.
Then two body blows in quick succession.
On February 20, the Supreme Court ruled 6-3 that IEEPA does not authorize the President to impose tariffs, invalidating the “Liberation Day”
reciprocal tariffs and the China, Canada, and Mexico trafficking
tariffs. An estimated $160 billion in tariff revenue, gone. Trump
imposed 15 percent global tariffs under Section 122, but those are
capped at 150 days and require Congressional extension.
His most powerful tariff tool was taken away by the courts. If you
cannot tariff your way to compliance, you need another form of leverage.
And then the Golden Fleet.
In December, Trump announced a new class of Trump-class battleships at Mar-a-Lago:
30,000 to 40,000 tons, armed with hypersonic missiles, railguns,
lasers, and nuclear cruise missiles. Twenty to twenty-five hulls. The
most ambitious surface combatant program since World War II.
Within 72 hours, every national security think tank and academia –
which all have close ties and funding with NATO nations – lined up to
kill it. With no time for due dillegence CSIS published the hit piece “The Golden Fleet’s Battleship Will Never Sail”
and estimated $9 billion per hull and predicted cancellation before the
first ship hits water. The Foundation for Defense of Democracies called
it a waste. Retired admirals on defense baords lined up to say the Navy
should buy small distributed platforms instead. Every defense analyst
competed to be quoted saying it was impossible.
The same establishment that produced three Zumwalts instead of
thirty, and thirty almost useless Littorial Combat Ships instead of
none, the same think tanks that has presided over the smallest Navy
since World War I, lined up overnight to explain why America cannot
build big ships anymore.
The same people who have no plan to close the destroyer gap that is right now undermining convoy escort operations in the Gulf.
The think tanks did not offer an alternative. They offered learned
helplessness. And that helplessness is the context in which Hormuz is
now playing out.
The Leverage Hypothesis
Now connect the dots.Strike Iran, and Europe either bends or goes dark in an energy crisis.
The European shipping community and political establishment spent the
past year dismissing, undermining, and mocking every Trump maritime
initiative. They scoffed at the USTR tariffs. They laughed at the SHIPS Act. They blocked the IMO exemptions. They refused to take American maritime policy seriously.
Now their energy supply runs through an insurance facility controlled by Washington.
“Let their navies figure it out.” Except everyone knows they cannot.
European naval forces are too small, too slow, and too poorly equipped
for sustained convoy escort operations through a contested strait. All
the European navies combined could not send more than three ships at a
time to defend the Red Sea. An entire German task force sailed around
Africa to avoid it....
So we don't have a lot of Taco Tuesday posts. One
