War and Drought Are Choking the World’s Most Vital Trade Routes
Since early March, a previously obscure waterway between Iran and Oman that very few people could name has become the subject of daily reporting around the world after Iran closed it in response to the attack on Iran by the United States and Israel. The Strait of Hormuz, which remains closed to most ships, is now known around the world as the transit point for 20 percent of the world's oil and…
Since early March, the previously obscure Strait of Hormuz, a waterway between Iran and Oman, has become a topic of global daily reporting after Iran closed it in response to the attack by the United States and Israel. The Strait of Hormuz is now known as the transit point for 20 percent of the world's oil and key materials, such as fertilizers, helium, and sulfur.
On the Arabian Peninsula, a conflict between Ansar Allah, also known as the Houthis, and Saudi Arabia has escalated, leading to the closure of the Bab el-Mandeb Strait, which connects the Red Sea to ocean-going routes to Asia. This has resulted in Saudi oil tankers taking a longer route around Africa to reach Asia, despite higher costs.
The Houthis may target Saudi ports on the Red Sea, potentially escalating the situation. Meanwhile, human-made problems in shipping are being joined by climate-induced challenges, such as drought, which is reducing the capacity of the Panama Canal. European shipping route, the Rhine River, is experiencing its lowest levels since records began in 1880, forcing vessels to carry less cargo and increasing reliance on trucks and rail.
These bottlenecks are expected to persist, with no immediate signs of improvement due to the ongoing conflicts and natural challenges.
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