The Economic Implications of Disruptions to Maritime Oil Chokepoints

The free flow of oil is critical to world commerce and global economic prosperity. Oil trade requires the use of maritime trade routes, which can span from hundreds to thousands of miles. Hence, oil tankers often travel through straits and canals to reduce transport costs. These passageways—referred to as chokepoints—are narrow channels along the most widely used global sea routes.

This study evaluates how potential disruptions at critical chokepoints could affect the U.S. economy and economies around the world. While our methods could be used to understand the importance of any chokepoint, we focus on the Strait of Hormuz, the Strait of Malacca, the Suez Canal, the Bab el-Mandeb Strait, the Turkish Straits, and the Panama Canal. At any of these chokepoints, the world’s oil supply is at risk of disruption, and the oil transported through these chokepoints has great value. As much as 17 million barrels per day (bbd) flow through the Strait of Hormuz alone. Additionally, chokepoints tend to be in proximity to poor countries, which often lack institutions that can enable or provide maritime security.

Threats to the world’s chokepoints are numerous and diverse. The Strait of Hormuz is under a direct threat of closure by Iran. Somali pirates and terrorists are a growing concern for traffic through the Bab el-Mandeb Strait and the Suez Canal. China may become involved in a conflict over the Strait of Malacca as Asia’s demand for energy grows, and environmental catastrophes could grow in scale and frequency in the Turkish Straits as tanker traffic increases.

We must be prepared for a disruption to the flow of oil—potentially through a maritime chokepoint.