Sea Passage Militarization Impacts Markets
The sea lanes in the Arabian Gulf and the Bab el-Mandeb Strait are witnessing a geopolitical escalation that threatens the safety of navigation and the stability of global energy supplies and trade. The Strait of Hormuz stands out as a key passage for about one-fifth of the world's oil exports and faces potential Iranian closure risks. Meanwhile, the Bab el-Mandeb Strait, through which approximately 6 million barrels of oil pass daily and representing around 12% of global maritime trade, is under security threats from the Houthi group in Yemen. These tensions pose high risks to vessel movements, increase costs, and complicate the security environment, especially with multiple military bases present. This situation leads shipping companies to reassess routes and raises prices, amid ongoing international efforts to safeguard freedom of navigation and prevent strategic corridors from becoming tools of conflict.
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