Diversions by container carries away from the war-torn Strait of Hormuz expose the region’s structural vulnerability, a new analysis finds, as decades of underinvestment in bypasses severely limit the capacity of alternative logistics to absorb displaced cargo. The narrow, winding Strait of Hormuz – the sea gateway Iran and the United Arab Emirates/Oman peninsula – has been a longtime source of concern regarding its potential closure. Connecting the Persian Gulf to the Gulf of Oman and the Indian Ocean, it’s a chokepoint for as much as 30% of global crude oil shipments moving by tanker, as well as critical shipments of liquefied natural and propane gas, petrochemicals and fertilizer for crops, notes Drewry Senior Associate Eirik Hooper, in a new report. window.googletag = window.googletag || {cmd: []}; googletag.cmd.push(function() { googletag.defineSlot(‘/21776187881/FW-Responsive-Main_Content-Slot1’, [[300, 100], [320, 50], [728, 90], [468, 60]], ‘div-gpt-ad-1709668545404-0’).defineSizeMapping(gptSizeMaps.banner1).addService(googletag.pubads()); googletag.pubads().enableSingleRequest(); googletag.pubads().collapseEmptyDivs(); googletag.enableServices(); }); googletag.cmd.push(function() { googletag.display(‘div-gpt-ad-1709668545404-0’); }); The disruption of the oil trade has already been felt in the United States, driving up the cost of diesel, while gas prices have risen by 70 cents at the pump. Liner operators have announced a range of emergency surcharges and rate hikes to account for the cost for diverting container ships away from the region. While Persian Gulf ports only account for 3.5% of the global container trade, extended disruptions mean cargo will stack up at ports. This will affect supply chain fluidity as the overflow dominoes from the Gulf to ports in Asia, and eventually affects operations of U.S.-bound services. The…
