The once-mighty Royal Navy is now but a shadow of its former self, plagued by years of budget cuts and management scandals. It has shrunk to its smallest size since the Napoleonic Wars. Lord Nelson must be turning in his grave.

Yet despite the sorry state of its fleet, Britain remains the lord of the seven seas, albeit in a different fashion. Together, the Anglo-Saxons on either side of the Atlantic control the oceans and global shipping without needing to deploy a single vessel – a phenomenon unprecedented in history.

Today, the real control of the oceans is concentrated within a few square blocks of the City of London. There, black-tie lawyers, average adjusters, marine surveyors, brokers and underwriters sit side by side. They wield more practical power than most admirals as they underwrite global maritime insurance.

A commercial ship cannot enter a major port, secure financing or legally transit critical waterways like the Suez or Panama canals without insurance. While this operational reality has existed for the past century, the US government only realised its true potency about 20 years ago, as documented by Henry Farrell and Abraham Newman in their book Underground Empire: How America Weaponised the World Economy.

Washington has gradually transformed the global maritime insurance system into a highly effective tool of economic statecraft; controlling access to it allows the US to project financial power across the world’s oceans. If a marine insurer covers a vessel sanctioned by the United States, Washington can block those financial flows, effectively freezing the insurer out of the global banking system.

However, unilateral financial coercion is reserved as a last resort. For routine enforcement, Washington can rely on London and its massive cluster of insurers. London remains the undisputed capital of global maritime insurance. Even when a policy is not issued directly in the City, the deal is almost always reinsured through the London market.