Global Shipping Faces Dual Chokepoint Crisis
Global supply chains are under severe strain as both the Red Sea and the Strait of Hormuz are now considered high-risk corridors, disrupting container and energy flows. With Saudi Arabia's attempts to reroute oil facing resistance, Oman's port of Salalah is now the only major regional hub operating near capacity, creating severe bottlenecks for goods moving between Asia, Europe, and North America.
The dual threats follow a period of relative calm. Houthi attacks in the Red Sea, which began in November 2023 in response to the conflict in Gaza, had paused in October 2025. This led major carriers like Maersk and Hapag-Lloyd, partners in the Gemini Cooperation, to begin resuming transit through the vital Suez Canal corridor earlier in 2026, albeit with heightened security. Iran's Islamic Revolutionary Guard Corps (IRGC) has now declared the Strait of Hormuz effectively closed to commercial shipping, with senior commanders threatening to "set ablaze" any vessel attempting to pass. This is not a formal legal closure, but the Joint Maritime Information Centre has elevated the regional risk assessment to "critical," its highest level, indicating attacks are almost certain. As a result, vessel traffic through the strait, which handles about 20% of the world's crude oil, has collapsed by over 80%. Major shipping lines including Maersk, MSC, and CMA CGM have suspended all vessel crossings in the Strait of Hormuz and are once again diverting Asia-Europe routes away from the Red Sea. Rerouting around Africa's Cape of Good Hope adds 10 to 14 days to transit times, significantly increasing fuel costs and carbon emissions. CMA CGM has already imposed an emergency conflict surcharge of up to $4,000 per container for cargo in the region. The disruptions have left approximately 170 container ships, with a combined capacity of 450,000 TEU (twenty-foot equivalent units), stuck inside the Persian Gulf. The Port of Jebel Ali in Dubai, a major global hub, temporarily suspended operations as a precautionary measure. This paralysis not only affects energy markets but also creates severe delays for all goods, with companies like COSCO evaluating alternative discharge ports for stranded vessels. The Port of Salalah's position as a key hub is underscored by its recent $300 million expansion, which increased its capacity from 4.5 million to 6 million TEUs annually. This upgrade was crucial in handling a 21% surge in container volume in the first half of 2025, largely driven by the Gemini alliance services. However, with its general cargo terminal already operating near full capacity, the port's ability to absorb further diversions is limited. For the beauty and wellness sectors, which rely on global sourcing for raw materials and finished goods, the impact includes rising operational costs, product shortages, and launch delays. The increased freight charges and longer lead times directly threaten the "just-in-time" inventory models prevalent in the industry, forcing brands to consider strategies like consolidating orders and diversifying supply chains to build resilience against such geopolitical shocks.
