Oxford Economics flags concentrated trade risk across 27 maritime choke points

Oxford Economics said in a new report released on Aug. 15 that global trade is heavily dependent on 27 key maritime choke points, leaving energy flows, commodity shipments and the wider economy exposed if any one of those routes suffers a major disruption. The report said the nearly six-month U.S.-Iran conflict has already hindered shipping through the Strait of Hormuz, a core artery for global energy transport that handles about one-fifth of world oil supply. Rising attack risks for commercial vessels have slowed shipping, lifted international oil prices and pushed U.S. gasoline prices above $4 a gallon, adding to inflation pressure. Beyond Hormuz, the report identified the Strait of Malacca, the Taiwan Strait, the Suez Canal, the Strait of Gibraltar and the Panama Canal as other critical chokepoints. It said Asia has the world’s densest network of trade routes, with the Strait of Malacca linking the Indian and Pacific oceans, while the Taiwan Strait carries about one-quarter of global trade flows. Oxford Economics also warned that geopolitical conflict and climate change are increasing risks, citing lower water levels in the Panama Canal due to drought and El Niño, which have limited cargo loads and raised shipping costs.