6 choke points that can disrupt global trade

For all the technological sophistication of today’s supply chains — AI-powered route planning, automated ports, satellite tracking — the system still hinges on a few tight maritime corridors. These chokepoints, often just a few kilometers wide, carry the bulk of the world’s oil, grain, electronics, and energy. They are vital arteries of commerce, but also its most dangerous pressure points.

From the Red Sea to the Panama Canal, chokepoint disruptions have become a recurring theme and a growing threat.

This article examines six of the world’s most strategically significant maritime chokepoints: what flows through them, who depends on them, the risks they face, and how the insurance markets are increasingly pricing in the fragility of global trade.

1. Strait of Hormuz

Where is it located? The Strait of Hormuz is a narrow maritime corridor between Iran and Oman, linking the Persian Gulf with the Gulf of Oman and the Arabian Sea. At its narrowest, it spans just 21 miles. As the only sea passage from the Persian Gulf to the open ocean, it is a critical gateway for the world’s top energy exporters.

Why is it a chokepoint? As the sole maritime exit for five of the world’s top ten oil producers — including Saudi Arabia, Iraq, the UAE, and Kuwait — the Strait plays an irreplaceable role in global energy flows. It is one of the few routes where massive trade volumes intersect with high political risk. Its proximity to Iran makes it a constant flashpoint for geopolitical tension, military standoffs, and threats of closure.

What commodities move through it? Hormuz is primarily an energy corridor. Crude oil, LNG, refined petroleum products, naphtha, condensates, and LPG all flow through the strait. These exports underpin the economies of Gulf states and are central to global fuel and petrochemical markets.

From where to where? Exports originate from key Gulf ports: Ras Tanura and Yanbu (Saudi Arabia), Basra (Iraq), Mina Al Ahmadi (Kuwait), Ras Laffan (Qatar), and Fujairah (UAE). Most shipments head east to China, India, Japan, and South Korea. Some volumes also flow to Europe and emerging markets in Latin America.

How much trade passes through? In 2024, an average of 20.8 million barrels of oil and refined products transited Hormuz daily — about 25% of global oil consumption, according to Clarkson’s Research. Around 20% of global LNG shipments also passed through, mostly from Qatar. The total annual trade value exceeded $1 trillion, making it the world’s most valuable maritime chokepoint.

Risks and past incidents: Iran controls the entire northern shoreline and has fortified it with missile systems and IRGC naval patrols. In June 2025, following Israeli airstrikes on Iranian military targets, Tehran responded with drones, missiles, and threats to shut the strait. Several tankers were detained, prompting alerts across the shipping industry. Hormuz is no longer just strategic — it's a live conflict zone.

Insurance premiums: War-risk premiums have surged over the past five years, with sharp increases in late 2023 and again in mid-2025 after the Israel–Iran escalation. By June, underwriters raised premiums by 300–400%. Hull cover now costs up to 2% of a vessel’s value, and per-transit surcharges have exceeded $150,000. Hormuz is now priced as an active warzone by insurers.

2. Bab el-Mandeb

Where is it located? Bab el-Mandeb lies between Yemen and Djibouti/Eritrea, acting as the narrow gateway connecting the Red Sea with the Gulf of Aden and, by extension, the Arabian Sea. At just 18 miles wide, it is one of the most compressed shipping passages in global trade.

Why is it a chokepoint? As the only path between the Suez Canal and the Indian Ocean, Bab el-Mandeb is an unavoidable route for vessels traveling between Europe and Asia. Its strategic location next to Yemen, an active conflict zone, makes it a high-risk corridor for global shipping.

What commodities move through it? The strait is a key artery for crude oil, LNG, refined fuels, dry bulk, and containerized goods, including electronics, textiles, and machinery.

From where to where? Energy cargoes flow from the Persian Gulf to Europe and North America. Containerized freight moves both ways — from Asia to Europe and vice versa. It’s also a trade lifeline for parts of East Africa.

How much trade passes through? In 2024, Bab el-Mandeb carried 8.7% of global seaborne volume and over 15% of value. An estimated 6.2 million barrels of oil passed through daily, along with high volumes of containerized cargo, together valued at more than $2 trillion annually.

Risks and past incidents: Houthi attacks since late 2023 have disrupted vessel movements, damaging multiple ships. Major carriers suspended Red Sea routes, opting instead to sail around Africa, adding significant time and cost.

Insurance premiums: War-risk premiums surged by up to 500% in 2024. Previously, around $50,000 per-voyage coverage rose to over $300,000 for high-value ships. Armed escorts and real-time tracking became prerequisites for coverage, and Bab el-Mandeb remains one of the most expensive maritime passages to insure.

3. Strait of Malacca

Where is it located? The Strait of Malacca lies between the Malay Peninsula and the Indonesian island of Sumatra, linking the Indian Ocean with the South China Sea and the Pacific. At its narrowest point near Singapore, it measures only 1.5 nautical miles across.

Why is it a chokepoint? As the fastest sea route between the Middle East and East Asia, Malacca is the busiest and most commercially vital shipping lane in the world. Its depth and width limitations restrict vessel capacity and force slower navigation, compounding the risks of congestion and piracy.

What commodities move through it? The strait carries a blend of bulk and containerized cargo. Eastbound flows include crude oil, LNG, and other raw materials from the Middle East and Africa. Westbound traffic largely comprises electronics, machinery, textiles, and autos exported from Asia.

From where to where? Gulf oil moves toward China, Japan, South Korea, and India. Manufactured goods from China, Vietnam, and Malaysia head west to Europe, Africa, and the U.S. Singapore plays a central role as both a refueling station and transshipment hub.

How much trade passes through? In 2024, Malacca carried 23.7% of global seaborne trade by volume — the highest of any chokepoint. Daily flows included more than 42 million barrels of oil and petroleum products. The total cargo value surpassed $2.8 trillion.

Risks and past incidents: Piracy remains a concern in nearby Indonesian waters. The high density of ship traffic increases accident risk near Singapore. Regional military activity in the South China Sea adds further volatility. Environmental threats like volcanic eruptions, though rare, remain a long-term hazard.

Insurance premiums: While more stable than other chokepoints, premiums rose modestly in 2024. Piracy surcharges returned for ships without private security. War-risk cover has increased selectively, particularly for flagged vessels traveling through politically sensitive areas like Taiwan or the Spratly Islands.

4. Suez Canal

Where is it located? The Suez Canal cuts through northeastern Egypt, connecting the Mediterranean Sea with the Red Sea. At just over 120 miles long, it offers the shortest maritime route between Europe and Asia without having to sail around Africa’s Cape of Good Hope.

Why is it a chokepoint? The Suez Canal is a manmade waterway but remains one of the most strategic natural bottlenecks in global trade. It allows ships to shave off more than 5,000 nautical miles compared to the route around southern Africa. This saves 8–12 days in transit and massive fuel costs, especially for container ships and tankers.

What commodities move through it? The canal accommodates a mix of containerized goods, crude oil, petroleum products, LNG, chemicals, grains, and manufactured exports. It is particularly vital for Asia–Europe container traffic and Middle Eastern energy exports bound for Europe.

From where to where? Eastbound, it carries European exports to markets in the Indian subcontinent and Southeast Asia. Westbound flows bring Asian manufactured goods, Middle Eastern oil, and Gulf petrochemicals to Europe and North America. Egyptian ports like Port Said and Suez act as staging points.

How much trade passes through? In 2024, the Suez Canal handled approximately 12% of global trade by volume and more than $950 billion in goods. However, instability in the Red Sea and rerouting led to an 18–20% decline in ship transits, as many carriers opted for the Cape route instead.

Risks and past incidents: The canal’s vulnerability was famously exposed in March 2021 when the Ever Given, a massive container ship, ran aground and blocked the canal for six days. The incident halted nearly $60 billion in trade. In 2024, Houthi attacks in the Red Sea sharply reduced Suez-bound container traffic. Egypt’s canal revenues dropped as a result, with government projections revised downward from $8 billion to $6.5 billion for the year.

Insurance premiums: Since late 2023, vessels using the Suez Canal via the Red Sea have faced surging war-risk premiums. As of 2024, war insurance for Suez-bound ships rose to between $500,000 and $1 million per voyage, depending on size and flag. Delays have also increased claims for perishable cargoes and missed delivery windows. Despite no direct threat within the canal itself, the proximity to conflict zones has made transiting the Suez riskier and more expensive.

5. Panama Canal

Where is it located? The Panama Canal cuts across the Isthmus of Panama in Central America, connecting the Atlantic (via the Caribbean Sea) with the Pacific Ocean. At just 50 miles in length, it saves vessels a detour of nearly 8,000 nautical miles around South America’s Cape Horn.

Why is it a chokepoint? As a manmade transcontinental shortcut, the canal is a linchpin of hemispheric trade. Its ability to accommodate both container ships and bulk carriers enables crucial flows between U.S. Gulf and East Coast ports, Asia, and Latin America. Its limitations — including vessel size caps and freshwater supply — make it highly sensitive to operational disruptions.

What commodities move through it? The canal is used for containerized cargo, automobiles, grains (corn, soy), LNG, LPG, chemicals, crude oil, and petroleum products. The U.S., China, and Japan are among its biggest users.

From where to where? Northbound traffic typically includes South American agricultural exports heading to the U.S. and Europe. Southbound flows feature U.S. and European machinery, vehicles, and chemicals destined for Latin America and Asia. Transpacific container traffic between East Asia and the U.S. East Coast is especially reliant on the canal.

How much trade passes through? In 2024, the Panama Canal facilitated roughly 3% of global seaborne trade volume, moving over 280 million tons of cargo. The annual trade value of goods transiting the canal reached an estimated $600 billion. However, prolonged drought conditions caused daily ship crossings to fall from 36 in early 2023 to as low as 21 by January 2024.

Risks and past incidents: The primary risk to the Panama Canal is environmental. It depends on rainfall to replenish Lake Gatún, which powers the locks. In 2023–2024, an El Niño-induced drought slashed water availability, forcing the canal authority to restrict vessel draft and limit daily transits. Delays stretched for days, prompting carriers to consider reroutes via Cape Horn or Suez alternatives.

Insurance premiums: While not a conflict zone, the canal’s congestion and environmental uncertainty have led to rising delays and cargo insurance costs. In 2024, wait-time insurance add-ons rose by 30–40%, particularly for time-sensitive cargoes like perishable foods and electronics. Some insurers began requiring force majeure clauses for contracts transiting Panama during dry seasons.

6. Turkish Straits

Where is it located? The Turkish Straits comprise two narrow waterways — the Bosporus and the Dardanelles — that connect the Black Sea to the Sea of Marmara and then to the Aegean and Mediterranean Seas. They bisect the city of Istanbul and are fully controlled by Turkey, giving Ankara a central role in regulating the only maritime outlet for landlocked Black Sea nations.

Why is it a chokepoint? At just 0.5 miles wide at some points, with steep banks, fast currents, and heavy urban traffic, the Bosporus is one of the world’s most difficult navigational straits. Together with the Dardanelles, this corridor is the only sea route for key Russian, Ukrainian, and Georgian exports. Any blockage — physical or political — can paralyze grain and energy shipments from Eastern Europe.

What commodities move through it? The straits handle large volumes of crude oil, oil products, natural gas condensates, grain, steel, fertilizers, and containerized goods. Nearly 3% of global seaborne trade volume passed through them in 2024, according to Clarksons Research.

From where to where? Russian and Kazakh crude oil, wheat, and metals exit via the Black Sea ports of Novorossiysk and Tuapse and head to southern Europe, North Africa, and Asia. Ukrainian grain shipments, vital for global food security, also depend on access to this corridor. Energy and goods from Turkey and the Caucasus move in both directions.

How much trade passes through? In 2024, about 480 million tons of cargo transited the Turkish Straits, with an estimated trade value of $300 billion. Over 40,000 vessels — many of them tankers and bulk carriers — passed through annually, making it one of the busiest maritime passages in the world.

Risks and past incidents: The straits have a history of maritime accidents due to fog, mechanical failures, and human error. In March 2024, a Russian tanker operating under opaque ownership collided with a container ship, prompting calls for stricter inspections. Turkish authorities routinely pause traffic for naval drills, dignitary visits, and even wildfire response, leading to unpredictable delays. Shadow fleet tankers transporting Russian oil have raised alarms over insurance and environmental risk.

Insurance premiums: Due to congestion, political risk, and a surge in under-insured shadow fleet vessels post-2022, war-risk and environmental liability premiums have steadily increased. As of 2024, premiums rose by 35–50% for vessels lacking verified insurance or clean ownership records. Turkey has threatened to deny passage to ships that can’t prove adequate coverage, adding further uncertainty for charterers and insurers.