Chokepoint: how Iran changed the game on trade

Global trade is facing renewed risks, with recent disruptions underscoring how easily flows of goods, energy and commodities can be interrupted.

The closure of the Strait of Hormuz following the Iran war caused traffic to collapse, sending the prices of oil, natural gas and key industrial inputs sharply higher.

The resulting supply shocks have pushed up inflation across economies and weighed on growth, reinforcing the central role of maritime trade in the global economy.

CommBank Senior Geo-Economics Analyst Madison Cartwright said recent developments have marked a turning point for global trade norms. Disruptions including the collapse in traffic through the Strait of Hormuz after the Iran war and earlier blockades in key routes such as the Bab el-Mandeb Strait have shown how quickly chokepoints can be leveraged to disrupt trade and push up global commodity prices.

“This is a significant development, with broader complications for freedom of navigation and global trade,” he said.

A shift in the rules governing global trade

The ceasefire memorandum of understanding between the US and Iran has created a pathway for Iran to exert greater control over the Strait of Hormuz, Dr Cartwright said. 

Under the agreement, the US has conceded future authority over the strait to Iran, opening the door for Tehran to introduce transit or “service” fees on shipping.  

That shift has fuelled concerns that long-standing norms governing maritime trade are weakening, potentially allowing countries that control chokepoints like the Strait of Hormuz to restrict access or charge ships for passage.

“The ‘freedom of navigation’ norm has traditionally discouraged any disruption to maritime traffic, including fees and tolls,” he said. “This norm has been weakened.”

The US-Iran agreement could set a precedent for other nations to impose similar controls, marking a shift in how global trade routes are governed.

Chokepoints emerge as tools of geopolitical leverage

Recent disruptions in key shipping lanes also underscore how chokepoints are increasingly being weaponised for strategic gain, as geography gives even small nations and other groups the ability to disrupt global trade.

Narrow, high‑traffic routes with limited alternatives, chokepoints like the Strait of Hormuz are easy to target and difficult to secure. This creates opportunities for “asymmetric” tactics, giving smaller players the ability to exert influence over much larger economies by interrupting critical supply chains.

“The Houthis and Iran have used chokepoints to weaponise global commerce for political goals,” Cartwright said.

Recent blockades in the Bab el‑Mandeb Strait and the Strait of Hormuz show how quickly disruptions can cut shipping traffic and force vessels onto longer, more costly routes, amplifying cost pressures in commodities and goods. 

It’s not economic strength but geographic positioning that makes these disruptions both possible and powerful, Cartwright said.

“Neither blockade was an expression of economic power,” he said.

In effect, chokepoints are becoming strategic pressure points in the global economy, where control over narrow trade routes can quickly translate into outsized geopolitical influence.

Asia Pacific and advanced economies most exposed

The risks are most acute in the Asia Pacific, where the importance of trade and geopolitical tensions intersect. “Security of trade routes shapes geopolitics in the Asia Pacific,” Cartwright said.

The Asia Pacific region is home to numerous heavily trafficked chokepoints and strategic flashpoints, including the South China Sea and Taiwan, amplifying the potential for disruption. China’s reliance on the Malacca Strait for energy imports, often referred to as the “Malacca dilemma”, highlights the strategic importance of maintaining access to key shipping routes.

But the problems are global. 

As island nations reliant on maritime trade, Australia, New Zealand, Japan and the United Kingdom are all examples of nations that face heightened exposure, reflecting their dependence on shipping routes for both imports and exports. 

Broader risks beyond shipping

The vulnerabilities exposed by maritime chokepoints extend beyond shipping to a wider network of critical infrastructure, including pipelines, underwater cables and energy facilities.

“This is infrastructure that is difficult to protect and easy to attack,” Cartwright said.

The sabotage of the Nord Stream pipeline and attacks on Gulf energy facilities demonstrate how disruptions can quickly ripple through global energy markets, while damage to undersea cables can disrupt communications and financial systems.

Like geographic chokepoints, these assets are also vulnerable to asymmetric tactics, with weaker actors targeting critical systems rather than competing directly with stronger economies, expanding the concept of chokepoints beyond waterways to the infrastructure that underpins global trade, energy supply and digital connectivity.

A more fragmented global trade system

Recent events show we are entering a more complex global trading environment, where geopolitical tensions and security concerns are increasingly shaping economic outcomes. “The rules of the game are shifting,” Cartwright said.

As traditional norms erode, global trade is likely to become more fragmented, with chokepoints emerging as critical pressure points in an increasingly contested economic landscape.

You can read the full report here.