The US-Iran war is now squeezing two major shipping routes from Strait of Hormuz to the Red Sea — here’s why global trade could feel the impact

The US-Iran war is putting pressure on two of the world's most important maritime chokepoints at the same time, creating a problem that extends well beyond the battlefield.

Strait of Hormuz, the channel that connects the Persian Gulf and the Gulf of Oman, has already seen a drop in commercial transport due to military action and assaults on ships.

In fact, events in Bab el-Mandeb Strait, located in the southern part of the Red Sea, are posing yet another problem for this trade route between Asia, the Middle East, and Europe.


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The two waterways serve different shipping networks, but disruption at both would leave traders with fewer alternatives and increase the cost and complexity of moving cargo.

The situation is developing as Washington and Tehran remain engaged in indirect diplomacy over a possible arrangement that could reopen Hormuz and end the fighting. Three officials told The Associated Press on September 28 that mediators were still working with both sides, with talks expected to resume Monday.

Hormuz has become the immediate pressure point

The Strait of Hormuz has been at the centre of the conflict because of its importance to oil and gas shipments leaving the Persian Gulf.

Shipping data illustrates how sharply traffic has changed. On September 21, only two commodity vessels were recorded crossing the strait, compared with 10 the previous day.

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Reuters reported that this was far below the pre-conflict average of about 125 large commercial vessels a day. The figures may not capture vessels that switched off their automatic identification systems.

The disruption has already affected energy markets.

Oil prices have moved above $100 a barrel during the conflict as traders assess the possibility of prolonged interruptions to supply. The longer ships remain unable or unwilling to use the waterway, the greater the pressure on freight, insurance and alternative transport arrangements.

Gulf countries have been trying to keep oil moving through other routes, but those alternatives have limitations. The geography of the region means there is no easy substitute capable of simply absorbing all the traffic that would normally pass through Hormuz.

That makes the current diplomatic effort particularly important for shipping companies and energy markets.

Iran has proposed reopening Hormuz within seven days as part of a broader arrangement involving the lifting of the US naval blockade, easing of oil sanctions and a resumption of nuclear negotiations.

Bab el-Mandeb is becoming another maritime flashpoint

Thousands of kilometres away, another narrow waterway is facing its own security crisis.

The Bab el-Mandeb Strait links the Red Sea and the Gulf of Aden and is an important route for ships that navigate from the Indian Ocean to the Suez Canal. Any serious disruption on this route would mean that ships would have to take the long way through Africa.

However, things have become a lot more dangerous since the beginning of this month, when the pro-Iranian Houthis of Yemen captured Perim Island in the strait. The development gave the group a strategic position overlooking the shipping route.

Qatar has warned that losing reliable access to Bab el-Mandeb while Hormuz remains disrupted would have severe consequences for global trade.

The two waterways are therefore becoming linked in the minds of shipping and energy markets, even though the conflicts affecting them are not identical.

Hormuz is directly caught up in the US-Iran confrontation. Bab el-Mandeb is being affected by the conflict involving the Houthis and Saudi-backed forces in Yemen, with the wider regional war creating additional pressure.

One crisis, fewer routes for global trade

The significance of the two straits comes down to geography.

There are only a limited number of practical maritime routes connecting major energy-producing regions with consumers. When ships cannot safely use one chokepoint, companies can sometimes reroute them. When more than one important route becomes risky at the same time, those alternatives become harder to rely on.

That is already affecting shipping decisions.

Earlier this month, vessel traffic through Hormuz fell into single digits on some days, while Bab el-Mandeb continued to handle commercial traffic. Reuters reported on September 8 that seven commodity vessels crossed Hormuz on one Monday, compared with 29 through Bab el-Mandeb.

The matter has become even more complicated due to developments in Yemen, which have added another level of concern for the southern Red Sea shipping route.

In the case of energy-importing economies, the issue is not just about whether ships can transit the waterways. The shipping companies have to be wary of factors like war risk insurance, crew security, fuel expenses, and delays, among other things.

Those additional costs eventually work their way through supply chains.

What happens if both routes remain under pressure?

The immediate question for markets is whether the disruption around Hormuz can be reduced through diplomacy before problems around Bab el-Mandeb deepen further.

The United States and Iran are still discussing a possible arrangement. According to officials cited by AP, mediators are working on a proposal that would first reopen Hormuz and lift the US blockade, followed by steps involving sanctions. Washington is also seeking concessions related to Iran's nuclear programme.

Iran's seven-day proposal has added a specific timeline to that debate. Under the proposal outlined by Foreign Minister Abbas Araghchi, the reopening of Hormuz would follow several initial steps and could occur on the sixth or seventh day after Washington accepts the plan.

But reopening one waterway would not automatically resolve the risks facing shipping through Bab el-Mandeb.

That is what makes the current situation different from a single-route disruption.

The global shipping system is designed with alternative paths, but alternatives are not always interchangeable. A vessel diverted from Hormuz cannot necessarily use the Red Sea instead, and a ship avoiding Bab el-Mandeb may have to travel around Africa.

The result can be longer voyages, higher fuel consumption, rising insurance premiums and more expensive freight.

For now, the two maritime chokepoints remain separate theatres of a wider regional crisis. But their simultaneous vulnerability means that developments in one can quickly affect the calculations of shipping companies, oil traders and governments elsewhere.

If diplomacy succeeds in restoring safe passage through Hormuz, some pressure could ease. If fighting continues while the Bab el-Mandeb crisis grows, global trade could face a much more complicated shipping environment.

(With AP inputs)