Global maritime routes face disruption amid Iran conflict

Global maritime trade routes are facing increasing instability due to the ongoing conflict involving Iran. The crisis is impacting major transit points, including the Panama Canal and the Suez Canal.

In the Panama Canal, shipping companies are paying record-breaking sums to bypass extreme queues. The tanker G. Arete, owned by South Korea’s SK Shipping Co., recently paid USD 4.6 million in an auction to skip a potential 11-day delay. This surge in demand is driven by shifts in energy trade; as the Strait of Hormuz faces disruptions, Asian buyers are redirecting liquefied petroleum gas (LPG) and crude oil supplies from the Persian Gulf to the United States Gulf Coast, making the Panama Canal a vital shortcut.

Simultaneously, the conflict threatens the Suez Canal and the Bab al-Mandab Strait. Recent drone attacks on gas vessels in the Egyptian port of Damietta, which damaged a US storage unit and a Greek LNG tanker, signal that the regional war is encroaching on Egyptian waters. If threats persist across the Strait of Hormuz, the Bab al-Mandab, and the Suez Canal, three of the world’s most strategic maritime corridors could be compromised simultaneously, severely impacting trade between Asia and Europe.