Assessments of the likelihood of another deal sway between immediate and impossible. Regardless, the fleeting nature of June’s memorandum of understanding and ongoing Houthi rebel actions in the Red Sea highlight the bumpy path to any reopening. We expect progress through the remainder of the year to follow a pattern of one step forward, two steps back.
Recent analysis on the implications for global shipping has rightly focused on the importance of the Strait of Hormuz. But the Strait of Hormuz is just one of many global shipping chokepoints. Each passage has different vulnerabilities and varying importance to global, regional, and economy-specific trade. This Research Briefing maps where those bottlenecks are, what could close them, and which economies are most exposed.
What you will learn in this report:
- There are around 30 major chokepoints that matter for global trade. Some are household names, but most are accidents of geography. The volume moving through these passages is massive. For instance, almost one-quarter of global trade passes through the Malacca and Taiwan Straits.
- Two forces stand out as potential catalysts for trade disruptions. The first is geopolitics, where the nature of the risk is shifting. Chokepoints are increasingly treated as instruments of leverage rather than accidents of geography – assets to be controlled, taxed, or threatened.
- The second potential driver of chokepoint disruption is natural disasters and climate. The Panama Canal has cut vessel draughts five times this year as El Niño threatens to drain its water supply, and typhoons have twice shut the world’s busiest container ports in a month.
- For firms, the lesson is that diversifying suppliers isn’t enough if the goods still travel the same routes; transport risk needs assessing alongside concentration risk.
