Global energy security faces an increasing threat as the world’s five most vital maritime chokepoints, crucial for global oil and gas transit, are under escalating pressure from conflict, piracy, and environmental dangers, according to a recent analysis by Rystad Energy.
In 2023, an estimated 71.3 million barrels per day (bpd) of oil and petroleum products, along with approximately 26 billion cubic feet per day (Bcfd) of liquefied natural gas, were transported through these chokepoints, the Norway-based energy intelligence company said.
By 2024, the volume of oil and petroleum had decreased to 65 million bpd, and LNG to 24.8 Bcfd.
This decline clearly indicates increasing instability in some of the world’s most strategically important waters, Rystad’s data showed.
Recent declines in volume are partly due to temporary disruptions like Houthi attacks off Yemen and Iran-Israel tensions.
However, there’s also evidence of a long-term structural change, as traders and governments reroute flows via the Cape of Good Hope and alternative pipelines to adapt to ongoing instability.
Source: Rystad Energy
Likely impact on countries
China faces significant vulnerability due to its reliance on the Strait of Hormuz and the Strait of Malacca for transport.
This contrasts with the US, which is less exposed due to increasing domestic production, unlike Asia and Europe, which are heavily dependent on these straits.
“We have identified the five chokepoints most at risk, assessed the threats they face and outlined the far-reaching consequences for global energy markets,” Mrinal Bhardwaj, senior analyst, upstream research at Rystad, said in the analysis.
Any disruption at these chokepoints could shatter supply chains, trigger sharp spikes in energy prices and inflict severe economic damage worldwide.
The current market dynamics reveal a clear anticipation of continued maritime instability, as evidenced by the significant increase in insurance premiums and freight rates, the energy intelligence company said.
This upward trend suggests that financial markets are already factoring in the heightened risks associated with global shipping routes.
However, despite this preemptive pricing, the complete closure of any major maritime chokepoint—such as the Suez Canal, the Strait of Hormuz, or the Strait of Malacca—would undoubtedly trigger an unprecedented surge in price volatility, according to Rystad.
Such an event would not only send shockwaves through the energy sector but also severely test the inherent resilience of global energy supply chains, potentially leading to widespread disruptions and economic repercussions.
Approximately three-quarters of global oil demand relies on maritime chokepoints for transport. Of this, about one-fourth traverses the Strait of Malacca, and one-fifth passes through the Strait of Hormuz.
Source: Rystad Energy
Strait of Malacca
Handling about 24 million bpd of oil and gas, the Strait of Malacca is the world’s largest trade chokepoint.
This vital passage, situated between the Indian and Pacific Oceans, serves as a crucial route for the transport of the majority of crude oil and liquefied natural gas (LNG) from the Middle East to Asian nations, notably China and Japan.
This route’s crude and condensate imports are dominated by China, which accounts for 50% of the total volume. Saudi Arabia is the primary exporter, contributing 25% of the share, Rystad’s data showed.
Since the pandemic, oil and gas flow through the Strait had increased by 2.1 million bpd as of 2024. Although the route is known for piracy and theft, no major incidents have been reported this year.
Source: Rystad Energy
Strait of Hormuz
The Strait of Hormuz, between Iran, Oman, and the UAE, is crucial for global energy trade.
It handles about one-fifth of the world’s maritime oil and condensate trade (14.0 million bpd) and nearly half of the Middle East’s daily oil and condensate production, largely destined for Asian markets like China and India.
Half of Saudi Arabia and the UAE’s oil exports and a quarter of China’s oil demand transit this strait.
It’s also vital for LNG, carrying one-fifth of global volumes, including two-thirds of Qatar’s daily gas exports (16.3 Bcfd) to countries like China, India, and South Korea. China’s LNG imports via the strait have surged 2.5 times in five years, reaching 2.7 Bcfd.
“The strategic importance of the Strait of Hormuz was underscored during the recent Iran-Israel conflict, when Iran’s parliament proposed a bill to close it, although the plan was reportedly deferred,” Bhardwaj said.
If the strait were to be closed, it could disrupt nearly half of Middle Eastern oil exports, severely impacting global oil and gas transportation.
Suez Canal and Bab El Mandeb
The Bab el-Mandeb Strait has emerged as the Middle East’s second critical chokepoint, posing another potential risk to the stability of global oil and gas trade.
The Bab el-Mandeb Strait connects the Red Sea to the Gulf of Aden and the Arabian Sea, serving as a critical shipping route between the Suez Canal and the Indian Ocean.
The Suez Canal and SUMED pipeline, both vital for global energy, link the Red Sea to the Mediterranean.
Houthi attacks in late 2023 caused shipping volumes through the Bab el-Mandeb Strait to drop by nearly 50% within six months, impacting global seaborne oil trade and keeping traffic below normal.
A full closure would reroute vessels around the Cape of Good Hope, increasing voyage times and freight costs, further straining energy supply chains.
Source: Rystad Energy
Cape of Good Hope
The Cape of Good Hope, at South Africa’s southern tip, is now a crucial alternative maritime trade route, carrying 8-10% of global shipping traffic.
Oil flows via this route decreased from 7 million bpd in 2021 to 6 million bpd in 2023, largely due to reduced Chinese demand, lower African production, and India’s shift to Russian crude, Rystad’s analysis showed.
In 2024, oil traffic around the Cape of Good Hope spiked by nearly 50% to 8.7 million bpd.
This surge was driven by Houthi attacks in the Red Sea, causing shipping companies to reroute.
Approximately 40% of this oil was destined for China, with significant portions originating from the US and South America. Middle Eastern producers also diverted European-bound crude through the cape.
“Despite higher freight costs and longer transit times, traders increasingly prefer the Cape of Good Hope due to its lower security risks,” Rystad said.
Compared to other global chokepoints, it currently represents one of the safest maritime routes for crude oil transport.
Turkish Straits
Meanwhile, the Turkish Straits, comprising the Bosporus and Dardanelles, are a critical maritime route controlled by Turkiye, connecting the Mediterranean and Black Seas.
This strategic waterway, dividing Europe and Asia, is vital for global energy transport, facilitating oil and LNG shipments from the Caspian region and Russia to Asian and European markets.
Accounting for roughly 5% of global maritime oil trade, the Straits saw approximately 3.5 million bpd of crude oil and 0.5 Bcfd of LNG transit in 2023, with similar volumes projected for 2025.
Oil flow through the Turkish Straits decreased from 3.5 million bpd in 2020 to 3.2 million bpd in 2022 due to COVID-19 and the Russia-Ukraine conflict, which cut Ukrainian exports by 100,000 bpd.
Flows recovered to 3.4 million bpd in 2023 and are expected to remain stable in 2024.
The Turkish Straits are crucial, yet they are subject to various operational and geopolitical risks.
“The narrow and winding nature of the waterways increases the risk of maritime accidents and oil spills, while regional tensions and political interference continue to pose potential threats to the route’s stability and security.
