When Sea Corridors Trap the Supply Chain

Attacks on merchant vessels transiting the Red Sea have forced many shipping companies to abandon the Suez Canal, a critical artery of global commerce, in favor of a significantly longer detour around the Cape of Good Hope. This diversion adds approximately 10 to 15 days to delivery schedules and raises transportation costs by 30 to 40 percent. The repercussions of this logistical shift ripple across the global economy, from delayed deliveries and increased fuel consumption to surging costs of consumer goods and industrial inputs. Businesses that depend on just-in-time delivery models now face growing pressure to secure inventory in advance, while smaller enterprises may struggle to absorb the unexpected cost surges. Further compounding the crisis are renewed threats to blockade the Strait of Hormuz, one of the world’s most strategically vital maritime chokepoints. Any disruption here, even briefly, sends shockwaves through energy markets, instantly inflating global insurance premiums and eroding confidence in maritime security.

The Strait of Hormuz Chokepoint and Red Sea have Global Implications

Tensions in the Middle East, particularly around the Strait of Hormuz, are inextricably linked to global energy security. As one of the most critical maritime corridors on the planet, the strait serves as the gateway for nearly 20% of the world’s oil supply and nearly all of Qatar’s LNG exports pass through this narrow waterway. Its geographic location places it under the de facto influence of Iran, which positions Tehran as a silent yet crucial actor in the stability of global energy flows. Frequent maritime incidents ranging from hostile naval encounters to tanker attacks in the Red Sea intensify market uncertainty, trigger fluctuations in oil prices, and inflate shipping and insurance costs. These episodes expose the vulnerability of key transport arteries and heighten geopolitical risk, not only for regional actors but for the entire global economy. In this volatile context, Iran emerges as an invisible hand and its strategic leverage is unmistakable. By exerting indirect pressure, Iran reinforces its geopolitical relevance without the need for overt confrontation.

The South China Sea is the Epicenter of US–China Strategic Rivalry

The South China Sea has become one of the world’s most contested maritime corridors not only for its vast reserves of oil and gas, but for its indispensable role in global trade. This region serves as a vital conduit for energy flows to and from Asia, the Middle East, and Europe, making it a cornerstone of international energy security and commercial navigation. The People’s Republic of China has moved decisively to assert control over this maritime zone through the construction of artificial islands and the militarization of disputed territories, particularly around the Spratly and Paracel Islands. These efforts reflect a broader ambition to reshape established maritime boundaries and challenge international norms regarding sovereignty at sea. In direct response, the United States has reinforced its naval presence in the region, invoking the principle of freedom of navigation. This has involved expanded military operations and joint exercises with Indo-Pacific allies, signaling Washington’s intent to push back against unilateral territorial claims and preserve open sea lanes. As tensions escalate, the South China Sea has evolved into a high-stakes theater of global power competition. The rivalry between the US and China in this space carries profound implications, not just for regional maritime governance, but for the stability of global energy markets, international trade routes, and the future of the rules-based international order.

Timeline of the Events That Shaped Global Energy Strategy (1973–2025)

The way nations understand and prioritize access to energy, security, and sustainability is deeply rooted in the defining energy events of the past five decades:

1973 – The OPEC Oil Embargo: The embargo triggered a fourfold increase in oil prices and plunged Western economies into crisis. The shock catalyzed the creation of strategic oil reserves, led to new international management frameworks, and gave birth to the International Energy Agency (IEA).

1979 – Iranian Revolution: Another spike in oil prices underscored the geopolitical fragility of supply chains. In response, France increased its reliance on nuclear energy, while other nations explored domestic energy sources like coal and natural gas to reduce dependence on Middle Eastern oil.

1986 – Chernobyl Nuclear Accident: The disaster in Ukraine inflicted a severe blow to public trust in nuclear energy. In Europe, particularly in Germany and Italy, it fueled anti-nuclear sentiment and slowed expansion plans, reinforcing the divide between nuclear advocates and skeptics.

1997 & 2015 – Kyoto Protocol and Paris Agreement: The global recognition of climate changes shifted energy policy toward sustainability. Countries were committed to reducing carbon emissions, taxing pollution, and investing in renewable energy technologies. These accords marked a new era in which environmental concerns began to shape long-term energy planning.

2000s – Liberalization of the EU Energy Market: The European Union introduced competition and liberalization in the energy sector, leading to privatization. While fostering market efficiency, this transition often sidelined considerations of regulation and equity, with long-term consequences for energy access and resilience.

2011 – Fukushima Nuclear Accident: The disaster reignited global debates about the safety of nuclear power. Germany swiftly accelerated its nuclear phase-out, while other countries reassessed their energy portfolios, balancing nuclear risks with the urgency of decarbonization.

Since 2014 – Russia–Ukraine Conflicts: These tensions exposed Europe’s dependence on Russian natural gas. The escalation in 2022 prompted a rapid diversification strategy: the construction of new LNG terminals, renewed agreements with alternative suppliers, and a major push toward renewables.

By 2025 – Questions have emerged around the long-term viability of renewables due to their intermittent output, prompting several governments to reconsider nuclear power as a stable low-carbon complement while also advancing battery technologies to support grid-level electricity storage.

2030: A Decisive Horizon

Today’s global energy transformation is unfolding not in a vacuum, but within a charged arena shaped by maritime chokepoints, strategic dependencies, and overlapping spheres of geopolitical influence. Rather than fostering neutrality or resilience, the current system remains bound to the same power asymmetries and historical fault lines that have long governed access to resources. Without a concerted recalibration of the global balance, rooted in equitable access, mutual trust, and shared governance, energy security will continue to be held hostage by the very dynamics it seeks to transcend. As we approach the pivotal decade of 2030, the question is no longer whether institutional or military adjustments will occur, but whether they will generate a sustainable rebalancing of geopolitical power. Establishing a resilient and equitable global energy framework hinges on major powers reaching explicit or tacit alignment; absent such consensus, energy sovereignty claims risk remaining aspirational and structurally unanchored.

In today’s geopolitical landscape, the true lifelines of power are no longer confined to underground reserves, they stretch across maritime corridors, where strategic ambition, national sovereignty, and global stability intersect. The struggle to command energy transit routes rivals the battle over the resources themselves.

Modern Diplomacy - Energy - July 10 2025

https://moderndiplomacy.eu/2025/07/10/when-sea-corridors-trap-the-supply-chain/