Not the Strait of Hormuz: This Sea Route Would Be the Most Dangerous If Closed

Not the Strait of Hormuz: This Sea Route Would Be the Most Dangerous If Closed

Jakarta, CNBC Indonesia - The journey of a container ship from Shanghai port to Rotterdam typically takes around one month. This route crosses various strategic points, starting from the Taiwan Strait, the South China Sea, the Malacca Strait, the Indian Ocean, Bab al-Mandab, the Suez Canal, and up to the Strait of Gibraltar. For decades, these waterways have been the lifeblood supporting the smooth operation of the global economy.

However, recent geopolitical dynamics that have triggered the closure of the Strait of Hormuz and security disruptions in the Red Sea have awakened many parties to the serious threat now facing freedom of maritime navigation.

Mapping the Vulnerability Scale of Sea Routes

Around 85% of global trade volume and 55% of its value are distributed via sea routes. Based on route modelling analysis, the importance of a sea lane is not only measured by the trade volume passing through it, but also by the availability of alternative routes if the main lane is cut off.

This model considers the most efficient routes between the busiest ports and projects shifts in sea transport traffic if a strait is blocked.

The Main Threat Lies in Southeast Asia

Based on modelling data, the closure of the Strait of Hormuz, which incurs very high costs and halts 6% of total maritime trade, is not actually the worst-case scenario in terms of volume. The most fatal scenario for global supply chains is actually in Southeast Asia.

If all the straits stretching from Malacca to Australia are blocked, the impact would paralyse 26% of global maritime trade. Ships would be forced to take detour routes with an average additional distance of 7,797 kilometres.

Additionally, the closure of the South China Sea area could potentially disrupt 24% of global trade. In comparison, the closure of the Taiwan Strait, which has high geopolitical tensions, is recorded to impact 13% of trade, but requires only a relatively short detour route.

Disparities in Economic Impact Across Regions

The consequences of these navigation disruptions will impose different burdens on the world’s major economic powers. The United States is projected to be relatively more protected from most sea route blockage scenarios.

The closure of the Korea Strait, which has the greatest impact on the US, would only disrupt 14% of its trade with minimal diversion routes. In contrast, the European Union would face a critical situation if the Strait of Gibraltar and the Suez Canal are closed simultaneously.

Such a scenario could lock ship movements from the Mediterranean, impacting around 40% of Europe’s sea trade, of which 26% would come to a complete halt.

China also has a high level of vulnerability, as disruptions in Southeast Asian routes could hinder more than 40% of the country’s maritime trade.