Important Shipping Lanes in the World

By Ahmed Yussuf

Topic: Trade

About 90% of traded goods are shipped by sea, with 11% through the Strait of Hormuz.

The Strait of Hormuz has been blocked for two months due to the Iran war.

Oil prices have risen and the global economy has been affected.

A fifth of the world's oil output is shipped via the Strait of Hormuz.

Experts fear a new era of maritime trade where conventions are not followed.

The US has restricted maritime movement through the Strait of Hormuz.

Get the latest news on the Middle East crisis.

The Strait of Hormuz is not the only vital route for shipping goods.

About 90% of traded goods are shipped by sea, with 13 key choke points.

Five of these choke points are crucial for global trade.

Iran's actions have thrown out decades of international shipping conventions.

If Iran's idea of charging ships catches on, global shipping will become more expensive and dangerous.

An expert says it could set a dangerous precedent and disrupt global trade.

The UN Convention on Law of the Sea protects ships' rights to transit through international straits.

Iran abided by the convention for decades before the war.

The introduction of a toll may impact other international straits.

Indonesia's finance minister suggested tolls on ships using the Malacca Strait.

There's a history of conflict in these straits, so where are they and why are they important?

Where is the Strait of Malacca?

Over 90,000 ships sail through the Strait of Malacca every year.

It's a critical bottleneck for Asian trade, especially for China.

Two-thirds of Chinese trade is carried on ships through the strait.

The strait is the shortest shipping route between East Asia, the Middle East, and Europe.

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The Strait of Malacca has 45% of the world's seaborne oil transit through it.

Significant volumes of soybeans and rice are transported through the strait.

Disruptions to marine traffic would affect economies worldwide.

If the strait is disrupted, the world's manufacturing will be disrupted.

Any disruption to the strait would be significant due to the volume of trade.

Ships can take alternative routes to avoid the Strait of Malacca.

One of the trade-offs with alternative routes is added distance.

If trade is stopped through the strait, there will be a shortage of suppliers.

Where is the Suez Canal?

Tens of thousands of ships transit the Suez Canal.

The trip can save at least 10 days of travel between Asia and Europe.

The Suez Canal represents 10% of global seaborne trade.

It's an important trade route for fertiliser produced in Eastern Europe.

A container ship was stuck in the Suez Canal for six days in 2021.

Houthi attacks led to a significant drop in traffic through the Suez Canal.

The number of ships going through the waterway decreased in 2023.

Ships can go around the Cape of Good Hope to avoid the Suez Canal.

Where is the Bab el-Mandeb Strait?

The Bab el-Mandeb Strait connects the Red Sea to the Gulf of Aden and the Indian Ocean.

It's critical for the export of oil and natural gas from the Middle East.

The strait represents 8.7% of global seaborne trade.

Houthi forces attacked ships passing the Bab el-Mandeb Strait.

The rerouting of ships led to a domino effect in other parts of the world.

Delays in the port of Singapore occurred due to the rerouting of ships.

These disruptions have a flow-on effect to maritime trade.

The bullwhip effect can occur when small changes in consumer demand result in large changes at the wholesaler level.

Disruptions at the beginning of the supply chain can exponentially grow.

Delays in getting commodities can grow into multiple weeks.

Where are the Turkish Straits?

The Turkish Straits are the only maritime passage between the Black Sea and the Mediterranean.

About 3% of goods traded by sea are shipped through the Turkish Straits.

The straits are crucial for wheat exports from Russia, Ukraine, and Kazakhstan.

Concurrent crises are leading the world to a path of crushing hunger and possible war.

Ukraine's wheat exports supplied 38% of African countries before the war.

Middle Eastern nations relied heavily on Black Sea grain imports.

The impact on global food supply was significant before Ukraine gained the upper hand.

The Turkish Straits are true choke points with no other maritime alternative.

Where is the Panama Canal?

The Panama Canal connects the Pacific and Atlantic oceans.

It accounts for about 2.5% of global seaborne trade.

The canal is strategically important for countries like the US.

It's crucial for the US's agricultural exports, such as maize and soybean.

The canal was constructed by the US and handed over to Panama decades ago.

There are concerns about the long-term health of the waterway.

The Panama Canal is supplied by fresh water from Lake Gatún.

A sharp decline in fresh water has led to a 30% drop in traffic on the waterway.

Disruption to the ships transiting the Panama Canal would impact the US.

Alternatives to the choke point exist, such as going around South America.

Disruptions can cause issues with the larger maritime ecosystem.

Agricultural exports and consumer goods would be disrupted if the canal is disrupted.

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