Chokepoints in Maritime Trade

The recent Israel-Iran conflict raised global concerns about a possible blockade of the Strait of Hormuz, which could disrupt maritime traffic. This, in turn, sparked fears about a potential rise in crude oil prices. Just like the Strait of Hormuz, several other locations along global sea routes are equally vital. Any blockade or disruption at these points can significantly impact world trade, highlighting their strategic importance.

A few days ago, a fierce conflict broke out between Israel and Iran. The United States also intervened, launching airstrikes on Iran’s nuclear facilities. In the face of escalating tensions, it was feared that Iran might use the Strait of Hormuz as a strategic weapon to disrupt oil transport. Such a move would not only escalate the conflict but also affect a vital energy route, causing global repercussions. This again underscores the critical importance of uninterrupted maritime transportation for the global economy.

Maritime transport forms the backbone of global trade, with around 80 to 90 percent of goods being moved via sea routes. These sea routes are chosen considering fuel efficiency, time, and distance, and some narrow passages have become strategic chokepoints – such as the Suez Canal, Strait of Hormuz, Strait of Malacca, and the Panama Canal. Due to their narrow width or geopolitical significance, these locations can be blocked relatively easily and hence hold immense strategic value.

Strait of Hormuz

Located between southern Iran and northern UAE-Oman, the Strait of Hormuz facilitates about 20% of global oil and one-third of natural gas transport. It connects the Persian Gulf to the Indian Ocean, serving as a critical passage for countries like Saudi Arabia, Kuwait, Qatar, UAE, Iran, and Iraq. Saudi Arabia, the world’s largest oil producer, sends around 40% of its oil through this route. On average, 17 million barrels of oil are transported daily through this strait, with 80% destined for Asia, especially China.

At its narrowest, the strait is only 33 km wide, making it vulnerable to disruption. Though Saudi Arabia has tried creating pipeline alternatives, they are limited in capacity. Thus, any obstruction in this route directly affects global oil prices. Given regional tensions, efforts are ongoing to find alternatives, but as of now, there is no effective substitute for this chokepoint.

Bab el-Mandeb Strait

Similar to the Strait of Hormuz, Bab el-Mandeb and the Suez Canal are also vital for fuel transport. This route connects the Indian Ocean

to the Red Sea and then to the Mediterranean, forming the main link between Asia and Europe. Around 12% of global trade passes through this corridor. At one point, Bab el-Mandeb narrows to just 32 km, making it a frequent target for Houthi rebels in Yemen and, earlier, Somali pirates.

The Suez Canal, stretching 194 km through Egypt, further facilitates trade between Europe and Asia. Its nationalization in 1956 led to a war involving Britain, France, and Israel. Later, during the 1967 Arab-Israeli war, it remained closed for eight years, severely affecting global trade. Though the canal has since remained operational during various regional conflicts, its vulnerability remains. If Bab el-Mandeb or the Suez Canal is blocked, ships must reroute around the Cape of Good Hope, increasing travel time by 9 to 17 days, and thus raising transport costs.

Strait of Malacca

This narrow strait between Singapore, Malaysia, and Indonesia is a vital route for Indian Ocean trade, particularly between West Asia, Europe, China, and East Asia. Around 30% of global trade passes through this strait, including two-thirds of China's seaborne trade and 80% of its crude oil imports. At its narrowest, the Malacca Strait is only 38 km wide, making it vulnerable. Disputes between China and Southeast Asian nations over the South China Sea, and India’s Andaman-Nicobar Islands nearby, pose strategic challenges.

The Taiwan Strait is also critical, handling 40% of global container traffic. However, tensions between China and Taiwan cast uncertainty over this route as well.

Panama Canal

This man-made canal connects the Atlantic and Pacific Oceans, playing a vital role in trade between the U.S. and East Asian countries. The canal, just 150 meters wide, accounts for over 5% of global trade. For the U.S. East Coast and East Asia, it facilitates 46% of trade, making it indispensable for transpacific commerce.

Other Notable Routes

• Cape of Good Hope (South Africa): A traditional route around Africa, rediscovered by Vasco da Gama, and still used as an alternative when the Suez Canal is blocked. It primarily handles iron ore, coal, and crude oil shipments.

• Strait of Gibraltar: Connecting the Mediterranean Sea and Atlantic Ocean, it lies between Spain and Morocco and is crucial for gas pipelines, power cables, and energy infrastructure. At its narrowest, it's just 15 km wide.

• Turkish Straits (Bosporus and Dardanelles): These connect the Black Sea to the Mediterranean, making them vital for grain and oil transport from Eastern Europe and Central Asia. Around 3.1% of global maritime trade flows through here.

Maritime trade will remain central to the global economy, and so will these strategic chokepoints. In times of conflict or tension, their importance only grows. Hence, global powers continuously monitor and strategize around these locations to ensure uninterrupted maritime movement.