Rerouting Oil Through Chokepoints Disrupts Global Market
The global oil market is reeling from the ongoing crisis in the Strait of Hormuz, but another factor is at play - rerouting oil through other narrow chokepoints. The Houthis' maritime blockade of Saudi Arabia has drastically reduced traffic through the Bab el-Mandeb strait, forcing tankers to take a detour around Africa or through the Suez Canal.
The Bosphorus Strait, which connects the Black Sea to the Mediterranean, is experiencing its own issues. Ukrainian drones have been targeting Russian oil facilities in Novorossiysk, causing a significant reduction in crude exports. The Caspian Pipeline Consortium terminal next door has also been affected, with Kazakhstan cutting production due to security concerns.
Panama's canal is facing a different challenge - drought. With water levels at an all-time low, the canal authority has had to reduce daily transit slots from 36 to 24, causing a significant backlog and forcing ships to take alternative routes through Suez or around Cape Horn.