Trade Chokepoints, explained
August 31, 2025
A chokepoint is a waterway where cargo shipping is concentrated (often a canal or a strait).
This could be the shipping of goods in general (container traffic) or crucial resources like crude oil.
The concentration of traffic in these chokepoints makes them targets for political manipulation, economic weaponisation and military power projection.
Over 80% of global trade in goods is shipped by sea.
Panama Canal
Location: connects the Atlantic and the Pacific Oceans.
Importance: handles 5% of global trade and 40% of US container traffic; a key route for US-Asia shipping.
Since 2017, China has been increasing its presence around the Panama Canal by investing in infrastructure and ports in the region through the Belt and Road Initiative. 2 of 5 major ports in Panama are Chinese-owned.
In 2025, President Trump claimed he will make a push to “take back” control over the Panama Canal.
The US firm BlackRock wants to buy operating rights for 43 international ports, including 2 in Panama, from a Hong Kong-based company. The deal is delayed to 2026.
In February 2025, Panama announced leaving China’s Belt and Road Initiative.
Climate: In 2023-2024, a record drought in Panama led to restrictions on ship traffic, affecting US-Asia and Europe-Latin America trade. The Canal Authority started plans for a new reservoir and water-saving systems to limit future droughts.
The Strait of Hormuz
Location: a narrow passage on the way out of the Persian Gulf.
Importance: the only route for the oil exporters in the Persian Gulf (over 20% of the world’s crude oil and liquid petroleum shipments).
Since the 1980s, Iran has repeatedly threatened to close the Strait but never fully blocked it.
In 2025, Iran made the threat again after the US strikes on three Iranian nuclear sites.
In 2019, Iran sabotaged an oil tanker and used GPS jamming in the strait amid tensions with the US over Iran’s nuclear program.
In 2025, China, Iran and Russia carried out a joint naval exercise close to the Strait of Hormuz (for the 5th time).
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Suez Canal and Bab al-Mandab Strait
Location: connect the Mediterranean Sea with the Red Sea and the Indian Ocean.
Importance: the shortest sea route between Europe and Asia, handling more than 30% of world container traffic and 10% of global maritime trade.
The Suez Canal is an artificial waterway that has been central to world trade for more than 150 years.
In 2015, Egypt built a second Suez Canal passage, enabling two-way traffic and doubling capacity.
Since the 2010s, Saudi Arabia and China have actively invested in the canal’s infrastructure.
In 2023/24 the United Arab Emirates (UAE) were Egypt’s top foreign investor at 80% of the total, while Saudi Arabia and China invested around 1% each.
In 2021, the Ever Givencontainer ship blocked the Suez Canal for 6 days after running aground causing disruptions to global trade. The Canal Authority lost $100M.
Since 2023, Iran-supported Houthi rebels in Yemen attacked over 100 commercial vessels with drones and missiles along the Bab al-Mandeb/Suez route.
This crisis motivated shipping between Europe and Asia to reroute around Africa’s Cape of Good Hope, causing delays and increased costs.
This cut Red Sea traffic by over 60% by December 2024, compared to pre-crisis averages.
Djibouti, a small country near the Bab al-Mandeb Strait, hosts strategic military bases from the US, the UK, China, Italy, France, Japan, South Korea, Germany, Spain and Saudi Arabia.
The Turkish Straits (the Bosphorus and the Dardanelles)
Location: connects the Black Sea with the Mediterranean Sea.
Importance: the only sea export route for Caspian oil (Russia, Kazakhstan, Azerbaijan), Ukrainian grain and other resources; double the traffic of the Suez.
Türkiye controls both the Bosphorus and the Dardanelles.
After Russia’s invasion of Ukraine, Türkiye closed the straits to warships from both countries.
In 2022, Türkiye helped broker the Black Sea deal which guaranteed security for restoring grain supplies from Ukraine close to pre-invasion levels.
Russia left the deal in July 2023, so Ukraine had to shift to a coastal sea corridor near Romania to secure its exports and reach the Bosphorus.
In 2024, Türkiye formed a joint task force with Romania and Bulgaria to protect Europe-Asia trade routes, while keeping a NATO-Russia “balanced neutrality”.
Iran is the main geopolitical rival of Saudi Arabia.
The two engage in proxy conflicts by supporting opposing groups across the Middle East.
A proxy war is a conflict where at least one of the countries is using a third country or a non-state actor to indirectly attack its opponent.
Iran-backed groups:
Hezbollah in Lebanon
Hamas in Gaza
Shia militias in Iraq and Syria
Houthis in Yemen
Saudi-backed groups:
Sunni factions in Lebanon
Sunni militants in Iraq and Syria
Government forces in Yemen
Crisis point: in September 2019, drone strikes on Saudi oil facilities resulted in a 50% cut in Saudi oil production.
The Houthis claimed responsibility but evidence pointed to Iran’s involvement.
In 2023, with Chinese support, Saudi Arabia and Iran agreed to restore diplomatic relations.
In May 2025, Iran approached Saudi Arabia and the United Arab Emirates with a proposal to cooperate on uranium enrichment.
Iran’s goal is to relax international concerns about its nuclear program, including by involving neighbouring states as stakeholders or observers.
One month later, the US bombed 3 key nuclear research sites in Iran. The extent of damage is unclear.
MBS has previously said that if Iran develops a nuclear weapon, Saudi Arabia “would have to get one, for security reasons”.
Saudi Arabia has good relations with the other monarchies of the Persian Gulf: Bahrain, Qatar, Kuwait, Oman and the United Arab Emirates (UAE).
In 2015, Saudi Arabia launched a coalition intervention against the Houthis.
Goal: restore the Yemeni government and prevent a pro-Iranian state on Saudi Arabia’s border.
The intervention is ongoing but failed to defeat the Houthis who currently control Yemen’s capital.
In recent years, ceasefire talks intensified, and Saudi Arabia appears willing to stop its involvement.
Russia
Since 2016, Saudi Arabia and Russia have coordinated oil policy through OPEC+.
This cooperation continued after Russia invaded Ukraine in 2022.
Western sanctions on Russia pushed it to look for new export destinations, and Saudi Arabia emerged as one of the main partners.
In 2022, Russian agricultural exports to Saudi Arabia increased by 49% compared to the year before.
Overall trade increased 73%, from $2.2 billion in 2021 to $3.8 billion in 2024.
By June 2025, Saudi Arabia had become the largest importer of Russian fuel oil.
Why? By importing Russian fuel (processed) oil, Saudi Arabia reduces the need to refine its own crude (raw) oil.
Saves more crude oil for export at higher prices
Avoids paying for processing at home
China is Saudi Arabia’s largest trading partner and the largest buyer of Saudi oil.
Saudi Arabia is part of the Belt and Road Initiative.
China invested in several Saudi infrastructure projects, including the Mecca-Medina-Jeddah railway connecting the holy sites of Islam.
Crown Prince Mohammed bin Salman (MBS) is the most powerful figure in Saudi politics.
MBS is the son of King Salman and was appointed Crown Prince in 2017.
In 2022, MBS was appointed Prime Minister by his father.
Traditionally, the title of Prime Minister belonged to the monarch himself. By appointing his son, King Salman transferred large executive powers to MBS. This also supports a strong succession (passing of the throne).
MBS presented an ambitious reform plan named Vision 2030.
Goal: to transform Saudi Arabia into a modernstate with a diversified economy.
Major points include:
Reducing dependence on oil
Expanding women’s rights
Weakening religious fundamentalists
So far, Saudi Arabia is successfully cutting oil dependence as non-oil activitiesmade up50% of the country’s economy in 2023.
Saudi Arabia plans to generate 50% of its electricity from renewable sources by 2030.
MBS is also attempting to rebrand the country as a global luxury destination, promoting tourism and entertainment.
He aimed to draw 100 million visitors annually by 2030. This goal was achieved in 2023 and 2024.
Saudi Arabia is building NEOM, a $500 billion futuristic mega-city on the Red Sea, but the project is facing delays.
Author Simone Chiusa
Editor Anton Kutuzov
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