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Culture War Roundup for the week of March 2, 2026

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US to Offer Below Market Insurance Rates to Arab Oil Shipping

CNBC Reports that the United States, in an effort to open Hormuz and avoid a rise in global oil prices, will take a series of steps designed to allow shipping to resume. While this will likely change, as it is definitely a "building-the-airplane-in-midair" policy and may in fact just be the administration trying to backfill a Truth Social post from Trump, we're likely to get something like this occurring.

-- There has been no actual Iranian effort to shut Hormuz at this time, rather Insurers have pre-emptively pulled coverage and as a result tankers are unwilling to risk it. It's questionable whether Iran can actually sink tankers, but the global insurance industry has decided it is not worth the risk. As a result oil prices have jumped a bit, though not insanely, since the war's beginning. The US government is now stepping in to offer insurance that insurance companies refuse to offer, "at a very reasonable price". This would amount to subsidizing foreign shipping companies by offering them below-market pricing for their insurance costs, and if payouts must be made the cost of a single loaded oil tanker is likely to land in $250mm range, and could run higher depending on oil prices.

-- While the argument that oil is a global market and it is important to keep energy costs and gas prices low for the American consumer...doesn't it feel odd to you that we're engaging in a giveaway to Aramco and other oil multinationals? It feels wrong, it feels antithetical to an America-First policy platform. We're using the heavily indebted US treasury to backstop foreign corporations and sovereign wealth funds. The policy itself may be sound, but the framing grates on me: we are escorting foreign ships, we are subsidizing foreign corporations, in exchange for little or nothing. I'd sooner see an agreement framed explicitly as Saudi Arabia paying for protection. If the benefits accrue disproportionately to foreigners, foreigners should shoulder the cost. America should not be in the business of subsidizing foreign shipping.

-- Does this alter the Bayesian probability that the Arab gulf kingdoms were the driving force behind the war in Iran? I'm not sure how to parse it, but it sure seems relevant. Is this indicative that they are not onside and need to be bribed to keep the coalition together? Or is it indicative that their support was the driving force all along and the USG is continuing to operate according to the wishes of Aramco?

-- On the positive, this does seem to be an admirable aligning of interests: the USG is both insurer and protector, so it has "skin in the game" to protect the oil tankers at all costs. Or at least up to $250mm or so a ship. Assuming such a thing is possible.

Are Iran really in a state where they can attack shipping directly (perhaps via drones) as compared to proxies like the Houthi kicking off again? (Apparently it was Hezbollah that droned the UK RAF base in Cyprus).

They're a little busy right now and my understanding is their centralised command and control structures have been decimated requiring devolving command decisions to regional/unit commanders.

I guess they are relatively undefended and Iran looks like its swinging in all directions to cause as much chaos as possible.

Yeeting a $400 flying lawnmower into a tanker isn’t that hard. And it genuinely is important for Iran, closing the straight is one of their main bargaining chips. They’ll put effort into it.

Yeeting a $400 flying lawnmower into a tanker isn’t that hard.

And won't do much to the tanker. Iran has drones which can do that, but they're a lot bigger and more expensive.