Global Shipping Routes Face Severe Strain as 25% of Oil Trade and 6% of Canal Flows Snarl
Updated
Updated · Atlantic Council · Aug 25
Global Shipping Routes Face Severe Strain as 25% of Oil Trade and 6% of Canal Flows Snarl
2 articles · Updated · Atlantic Council · Aug 25
Summary
19% of global LNG, 25% of oil trade and 30% of fertilizer trade move through the Strait of Hormuz, whose near-complete closure has already lifted prices for all three commodities.
More than 10% of global trade through Bab al-Mandab is also constrained by renewed Houthi attacks, while Black Sea shipping remains hazardous and the Panama Canal is tightening draft limits again in late August and early September.
Europe’s drought is compounding the shock: the Rhine is at record-low water levels and the Danube at a 30-year low, disrupting key inland routes for oil, LNG and other cargo.
Rerouting around Africa can add up to two weeks to voyages, raising fuel, labor and insurance costs that will feed into consumer prices because maritime transport carries more than 80% of world goods.
If disruptions persist for months, the report warns of tighter supplies of energy, fertilizer and food, stronger inflation and potentially lasting shifts in which trade routes remain commercially viable.