Berkshire Hathaway (BRK.B) Insures Ships Traveling Through the Strait of Hormuz

Berkshire Hathaway (BRK.B) has agreed to insure ships traveling through the treacherous Strait of Hormuz near Iran.

Through a reinsurance plan, Berkshire Hathaway is insuring oil tankers and other ships that transport crude and cargo through the Strait of Hormuz that connects the Middle East to Asia. Iran has threatened to target ships traversing the Strait, effectively closing the waterway.

The stakes are high as about 20% of the world’s crude oil travels through the Strait of Hormuz. Berkshire Hathaway, which is run by famed investor and current board chair Warren Buffett, has agreed to insure eligible vessels for damage to their hulls and cargo, as well as for liability involving injuries to people or other property when in the Strait of Hormuz.

Insurance Syndicate Formed

The added coverage includes new protections specifically related to wartime conditions in the form of war hull risk insurance, protection and indemnity, and cargo insurance. This is insurance that was not previously available to shipping companies that have exposure to the Strait of Hormuz.

Berkshire Hathaway is part of an insurance syndicate that has banded together to insure ships in the Strait of Hormuz and help get crude oil flowing out of the Middle East again. Other insurance companies involved include Travelers (TRV) and AIG (AIG).

Is BRK.B Stock a Buy?

Only a couple of analysts currently offer a rating and price target on Berkshire Hathaway’s more affordable Class B stock. So instead, we’ll look at the shares’ three-month performance. As one can see in the chart below, shares of BRK.B have declined 4.25% over the past 12 months.