US President Donald Trump has said the country's navy will protect ships in the Middle East "if necessary" in a bid to stop the energy supply crunch sparked by the US-Israel war with Iran.

A fifth of the world's oil and gas flows through the Strait of Hormuz, a narrow waterway wedged between Iran and the United Arab Emirates, but traffic has almost entirely halted following Iran's threats to "set fire" to ships.

Trump has said the US government will provide risk insurance "at a very reasonable price" to all shipping firms in the region to "ensure the FREE FLOW of ENERGY to the WORLD".

Experts warn these assurances might not be enough to ease companies' concerns.

Trump made the announcement on social media as global oil and gas prices continued to surge, sparking global concerns about the impact on household prices.

An Iranian official on Monday threatened to "set fire" to any ship trying to pass through the Strait of Hormuz and the Iranian military has reportedly fired on several vessels in the area.

Some insurance companies have since hiked the price of policies for ships in the region. Roughly 200 crude oil and product tankers are now stranded in the Gulf, according to data from Lloyds List Intelligence.

Trump on Tuesday said he had ordered the United States Development Finance Corporation (DFC) to provide the risk insurance to provide "at a very reasonable price, political risk insurance and guarantees for ALL Maritime Trade, especially Energy, traveling through the Gulf".

He also pledged military escort "if necessary... as soon as possible".

Oil prices dropped back after the announcement, which came as Trump was due to meet with Energy Secretary Chris Wright and Treasury Secretary Scott Bessent to discuss plans to address the energy issues.

Despite Trump's announcement, Richard Meade, editor-in-chief of shipping journal Lloyds List, said it remained unclear if the US president would be able to address the safety concerns driving the supply crunch.

He noted that Houthi attacks on the ships in the Red Sea in recent years prompted many shipping firms to avoid the passage with longer, more expensive routes, despite intervention by the US military.

"There was never really a point at which insurance alone would have prevented ships from going through the Strait of Hormuz," he said, adding "Just because you've got a naval escort doesn't mean to say you're safe."

Analysts have warned that a prolonged disruption could send crude oil prices above $100 a barrel, which would have a major impact on petrol prices, even in the US, where significant domestic production has tended to mute the impact of global price movements.

Speaking to reporters at the White House on Tuesday, Trump defended the war, saying "something had to be done" about the Iranian regime.

He conceded it might lead to high oil prices "for a little while" but brushed off long-term impact.

"As soon as this ends, those prices are going to drop, I believe lower than even before," he said.