By Maria Eirini Liodi

Threats to Global Shipping: Uncertainty remains as the conflict has resumed between the United States and Iran, following Iran’s targeting of commercial vessels in transit through the Strait of Hormuz in recent weeks. While there have been signals that diplomatic efforts continue behind the scenes, it remains unclear when a viable, long-term peace agreement may be reached. In the meantime, freedom of navigation through the Strait continues to be jeopardized, while U.S. allies in the Gulf bear the consequences of the conflict.

Renewed attacks have primarily targeted Jordan, Bahrain, and Kuwait, with Qatar and Oman also facing attacks, though to a lesser extent. In Kuwait, strikes have targeted critical infrastructure, including oil facilities, power plants, and desalination plants. These incidents add to the more than 6,000 strikes launched against Gulf states over the course of the conflict, with the United Arab Emirates being the target of nearly 50% of strikes.

At the same time, alarm bells are sounding over threats to regional shipping extending beyond the Strait of Hormuz. On 20 July, the Houthi’s in Yemen announced a naval blockade against Saudi Arabia. This could inhibit the country’s ability to export oil through the Bab el-Mandeb Strait, and beyond that, raises renewed concerns over the security of the Strait. 

While it remains unclear how this blockade will be implemented, the Houthi’s have previously demonstrated their ability to disrupt commercial shipping through the waterway from 2023-2025, in response to the war in Gaza. A renewed campaign, on the pretext of what Houthi’s argued to be Saudi-led intervention in Yemen, could therefore place significant additional pressure on global trade and energy flows already strained by the disruption in the Strait of Hormuz.

The full closure of the Bab el-Mandeb waterway would cut global oil supply by 7% – essentially taking most of Saudi oil exports off the market. While alternative routes north through the Suez Canal exist, Saudi Arabia would still not make up for losses of the oil that goes through Bab el-Mandeb towards Asian markets if there are disruptions.

The possibility of simultaneous disruption to two of the region’s most important maritime chokepoints presents a serious threat – one that underscores the need for countries in the region to mitigate potential losses in the event of renewed conflict or prolonged instability. While Gulf countries cannot change their geography – in this case, their proximity to regional conflict – they can invest in critical infrastructure that expands their long-term strategic optionality. What does that look like?

For the UAE, hostilities have led to a 90-95% drop in activity in the region’s largest port, Jebel Ali, prompting DP World’s planned project for a new port and container terminal on the UAE’s east coast. The implementation of such a project would reduce reliance on Jebel Ali by creating an additional opportunity to bypass the Strait of Hormuz during periods of crisis.

Similarly, Gulftainer has announced plans to expand the capacity of the deep-water port of Khorfakkan, on the UAE’s east coast, connecting it to the new Al Dhaid Multi-Modal Trade Corridor, which is set to be the UAE’s newest and largest trade corridor. Other planned projects include the Abu Dhabi National Oil Company’s proposal for the UAE’s first multi-fuel pipeline to facilitate the transportation of refined petroleum products without transiting the Strait of Hormuz. Keep updated in regards to threats to global shipping, bookmark this website.