Global Trade Hinges on Key Waterways Amid Rising Tensions

Market participants are closely monitoring key waterways around the world as tensions rise in various conflicts.

The Strait of Hormuz, a critical chokepoint for energy and agricultural shipments, has been thrust into the spotlight following the outbreak of the war with Iran in February.

Roughly one-fifth of the world's oil and gas exports transit the narrow waterway, injecting risk premium into crude oil prices when vessels are targeted by Iran or subject to a U.S. naval blockade.

Traders are now paying attention to other key waterways, including the Bab el-Mandeb Strait that connects the Red Sea to the Gulf of Aden and the Kerch Strait that links the Sea of Azov with the Black Sea.