U.S. Treasury Secretary Scott Bessent delivered a forceful rebuke of JPMorgan Chase & Co's recent assessment of a government-backed oil shipping insurance effort, calling the bank's work "terrible" and "completely irresponsible." The dispute centers on the Development Finance Corp.'s capacity to provide emergency coverage for oil tankers passing through the volatile Persian Gulf as geopolitical tensions continue to affect energy markets.
JPMorgan analysts, including Natasha Kaneva, published a report estimating that the DFC's remaining lending headroom stands at roughly $154 billion. In the same report, the bank calculated that private markets are not currently providing about $352 billion in the insurance needed for vessels bound for the Gulf, and concluded that the DFC's present resources are "too small for the risk."
Bessent, speaking on Fox Business, disputed the premises behind those calculations. He characterized the bank's assumptions as "completely flawed," emphasizing that DFC coverage is needed only while ships are inside the high-risk Strait of Hormuz and broader Gulf region. According to the Treasury's position, vessels return to standard private insurance once they exit that zone.
The Treasury's public push came days after President Donald Trump directed the Development Finance Corp. to stabilize trade flows amid escalating U.S.-Iran hostilities following what the administration has referred to as "Operation Epic Fury." In a further step, the administration announced a $20 billion reinsurance program aimed specifically at reviving shipping traffic through the Strait of Hormuz.
For market participants, the exchange between the Treasury and JPMorgan underscores how central insurance capacity is to maintaining flows through a strategically sensitive shipping corridor. The debate over whether government-backed firepower is sufficient has immediate implications for oil markets, where a supply shock is cited as a factor keeping Brent crude prices near $90 per barrel.
The disagreement also highlights the intersection of public policy and private market capacity in managing short-term disruptions to shipping routes. While JPMorgan's report quantified a large shortfall relative to perceived needs, Treasury officials have countered that those figures rest on assumptions about how long and where government coverage would be required.
As Washington implements a targeted reinsurance measure, the contention between a leading Wall Street bank and the Treasury could shape perceptions of risk for insurers, shippers, and energy market participants monitoring flows through the Strait of Hormuz.