Senate panel presses State Department on Iran shipping risks, Gavi funding

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Ashutosh Sureka

19 hours ago

Senate panel presses State Department on Iran shipping risks, Gavi funding — Senate grills on Iran, Gavi

At a hearing on the State Department's 2027 budget request, Senator Susan Collins raises concerns about how conflict involving Iran and disruption in the Strait of Hormuz affect energy markets and commercial shipping. She also pushes for the release of $600 million appropriated for Gavi, linking the funding dispute to global disease control and the U.S. role in the vaccine alliance.

Highlights

Rubio states the administration is assessing risks of Iran disrupting the Strait of Hormuz, which handles 20% of the world's oil, prompting interest in pipeline investment and North American energy alternatives.
Current pipeline infrastructure, including the Saudi western pipeline, lacks capacity to reroute oil away from the Strait of Hormuz, making any diversification a long-term challenge.
The U.S. delayed $600 million in Gavi funding for fiscal 2025–2026 over a vaccine preservative dispute, leading to loss of its board seat and impacting global vaccination efforts.

Budget hearing focuses on energy security

As reported by the Senate Committee on Appropriations, Collins questions Secretary Marco Rubio on whether the administration assessed the risk that Iran could interfere with traffic through the Strait of Hormuz, a route that carries about 20% of the world's oil. Rubio says the risk was known and weighed alongside broader regional threats when the president decided on military action tied to Iran's capabilities.

Rubio says the disruption is likely to accelerate longer-term changes in energy trade flows. He points to likely investment in pipeline and other export infrastructure westward and northward to reduce reliance on the strait, while also saying buyers are showing more interest in supplies from U.S. producers and Canadian exporters.

Collins asks whether the U.S. is working with allies and North American producers on alternatives that would limit Iran's ability to disrupt a critical shipping lane in the future. Rubio says existing infrastructure, including a western pipeline out of Saudi Arabia, does not have enough capacity to offset current strait traffic, and he describes any expansion as a long-term project rather than a quick fix.

Gavi payment dispute carries health and diplomatic costs

Collins also presses Rubio on the status of $600 million in fiscal 2025 and 2026 funds appropriated for Gavi, the Vaccine Alliance, after she led a bipartisan letter in May urging the State Department to resume U.S. contributions. She says the organization has helped vaccinate more than 1 billion children in poorer countries and argues that withholding funds weakens outbreak prevention as the world responds to Ebola in the Democratic Republic of the Congo.

Rubio says the administration's review centers on a preservative used in some vaccines distributed abroad but not used in vaccines in the U.S. He says Gavi has argued it cannot immediately discard millions of purchased doses and that both sides are discussing a possible phased approach, with consultation involving the Department of Health and Human Services.

Collins warns that the delayed payment has already cost the U.S. its seat on Gavi's board for the first time in the partnership's history. Rubio says he expects any eventual agreement to address both the funding release and restoration of that board seat, while maintaining that the administration wants to resolve the underlying dispute.

Our earlier coverage of the House Foreign Affairs Committee’s FY 2027 State Department budget hearing highlighted how lawmakers framed the request around an America First agenda and a tougher posture toward Iran. The article noted Chairman Brian Mast’s emphasis on increased briefings to Congress and his defense of stronger U.S. action against Tehran, alongside a focus on Western Hemisphere diplomacy involving Panama, Cuba, and Venezuela.

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