(Nov 10): French President Emmanuel Macron is negotiating with Gulf countries to find a way to lower insurance costs for vessels going through the strait of Hormuz, where transport has been disrupted since the US and Israel began strikes on Iran in February. 

Discussions are ongoing with Saudi Arabia and other Gulf states to design a publicly backed vehicle that would assume parts of the insurance risk for vessels to go through the waterway and facilitate deliveries of energy by lowering shipment costs, according to people familiar with the matter. 

The discussions involve different French ministries, from energy to foreign affairs and finance, said two of the people, who spoke on the condition of anonymity. 

It’s not immediately clear how such an insurance scheme would work in practice and what guarantees can be given. US President Donald Trump had announced a US$20 billion (RM81.14 billion) reinsurance programme for oil tankers earlier this year, but insurance costs have remained exorbitant as a result of repeated Iranian attacks on shipping.

A spokesman for the French president’s office confirmed that work was ongoing.

Macron traveled to Bahrain, the United Arab Emirates and Saudi Arabia last month to secure commitments to supply France with more diesel in coming months, in a bid to lower fuel costs that are contributing to social unrest in France. Macron also secured liquefied natural gas from Qatar for the winter months, which represents roughly 7% of the nation’s average monthly gas use.

Yet getting the fuel to French consumers from Qatar may prove considerably harder than securing it on paper. The Strait of Hormuz, the main route for the supply, remains heavily disrupted because of the US-Iran war, with gas volumes way below normal. Oil and gas prices have surged in Europe in recent months as attacks on vessels around the strait curbed shipments and boosted insurance costs.

Pump prices surged across the world after the US and Israel launched military strikes on Iran in February, disrupting exports of crude and reined products through the crucial Strait of Hormuz. Trump even conceded that Republicans lost the midterm elections because of the war in the Middle East, which has also driven up costs of insuring the ships going through. 

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