The era of free navigation is coming to an end as the rapid proliferation of drone and missile strikes across key maritime corridors turns global trade arteries into permanent battlegrounds. As war risk premiums skyrocket and shipping companies are forced to alter course, 80% of global merchandise trade enters a bleak reality, threatening the supply chain with dramatic delays, spiking costs, and a visible risk of shortages in essential goods.
It is not just Hormuz
The Strait of Hormuz is shaking global commerce, but it represents just one example of a vital maritime corridor turning into a battlefront in a new era of drones and missiles targeting economic lifelines. From Hormuz and the Red Sea shipping routes to the Black Sea, attacks on commercial vessels have disrupted trade, driven up insurance and freight costs, and forced shipping lines to reevaluate routes once considered dependable. The stakes are high: approximately 80% of global merchandise trade by volume moves by sea. The disruption of even a single core route can delay cargo, constrain supplies, and cause energy supply prices, food, and consumer goods to spike thousands of miles away.
Drones are changing naval warfare
"We have a new bottleneck and a new war," wrote David Roche, chairman and global strategist at Quantum Strategy, in a July report referring to the Sea of Azov—where Ukrainian drones hit Russian crude oil tankers—as well as the Black Sea. Roche described this fight as the first naval assault conducted almost entirely with drones, supplemented by missiles. Such weapons provide smaller military forces with a cheaper means to threaten ships, ports, and other infrastructure, where disruption carries immense economic fallout. Quantum estimates that roughly 25% of Russia's grain exports and 25% to 30% of its Black Sea oil shipments could face disruption. Russia produces more than one-fifth of internationally traded wheat, magnifying potential consequences for global food prices. Yevgeniya Gaber, a senior fellow at the Atlantic Council think tank, stated that Russia's move earlier this month to suspend navigation through the Kerch Strait—which connects the Sea of Azov to the Black Sea—has effectively closed off a vital sea corridor.
"Maritime transport through the Sea of Azov had become an increasingly critical alternative to the land corridor connecting Russia with occupied Crimea," Gaber told CNBC. "The economic impact is equally significant," Gaber noted, adding that the Sea of Azov has been utilized not only to transport sanctioned crude oil and petroleum products, but also grain, coal, and steel. Gaber remarked that Ukraine's efforts to exploit Russia's maritime and economic vulnerabilities constitute "one of the most significant blows against military and commercial fleets" since World War II. Indeed, Ukraine asserts that it has weakened nearly one-third of the Russian Black Sea Fleet since 2022.
Next target… the Panama Canal
At Hormuz, commercial operators face attacks and rapidly shifting signals regarding whether passage is safe. Governments can declare a waterway open, but shipowners make their own decisions based on the likelihood of a vessel being hit and crew members being injured or killed. "We often treat the Strait of Hormuz, the Black Sea, or Bab el-Mandeb as isolated events. They are not," said Daejin Lee, head of global research at Fertistream Freight. "These waterways are increasingly turning into battlefields within the broader transition toward a new global order," he told CNBC. And the next threats are already emerging. "If you are talking about the next flashpoint, I wouldn't look at the Strait of Hormuz," stated Lars Jensen, CEO of Vespucci Maritime. "I would look at the Panama Canal supply routes." The strategic passage, which has provided a shortcut for ships traveling between the Pacific and North Atlantic oceans for over a century, is already entangled in a geopolitical tug-of-war involving the US, China, and Panama over influence. Potential weather-related restrictions toward the end of this year and early next year could exacerbate these tensions by reducing capacity, Jensen added.
The impact on maritime transport
For shipping companies, the core challenge is preparing for a world where the next bottleneck can emerge before the previous one has a chance to reopen. Kevin O’Marah, co-founder and chief researcher at supply chain intelligence firm Zero100, told CNBC that Hormuz became the most critical theater of the US-Iran conflict after Iran realized that the mere threat to traffic there was sufficient to halt it. Although none of Zero100's clients had been attacked in the Strait, O’Marah noted that some had decided to avoid the risk by actively managing their inventories and rerouting shipments.
"This has added cost and delay for some of our clients across energy, food, and electronics sectors," he said. "Currently, traffic through the Straits appears to be moving at roughly half its normal flow. The recent collapse of the ceasefire has certainly damaged the situation, but no one is surprised. Supply chain leaders and, in particular, logistics experts like Martin Brower and Maersk are aware of this and have established protocols to manage the risk." Mitigation strategies include rerouting via the Arabian Peninsula using pipelines for oil, land transport through Turkey for certain cargo categories, and avoiding the region entirely to the extent possible, O’Marah noted. The Middle East conflict "does not look like a temporary escalation to most supply chain leaders, but appears likely to remain a long-term problem regarding freedom of navigation through the Strait of Hormuz," he added. "We are planning around a stable state of transit uncertainty, alongside costs tied to diversions, safety stock buffers, and additional freight rate surcharges." A spokesperson for insurance broker Gallagher told CNBC that war risk insurance—an additional coverage that addresses financial losses caused by war, terrorism, and civil unrest—remains available. However, they noted that "a small number, but not many" shipowners or charterers are opting to transit through Hormuz. "Given the challenging maritime security environment, premiums have increased compared to levels shipowners and charterers were accustomed to. Costs will vary depending on ship type, cargo, and routing, yet marine hull underwriters continue to provide coverage and assist in ensuring maritime trade can proceed with appropriate protection in place," they added.
How companies are reacting to shipping hazards
Alain Bejjani, a Dubai-based investor and entrepreneur, told CNBC that the structural consequence of naval warfare "is larger than most people realize." "The Gulf is framed by two straits, not one, and the region is now planning around the Strait of Hormuz and Bab el-Mandeb to the maximum extent possible," he said. "This is new. Past crises produced simple precautionary measures. This one is producing an architecture: land corridors, bypass pipelines, pre-warehousing near key destination markets. It will be expensive, take a decade, and carry ripple effects for decades to come. I expect other regions reliant on straits will follow, though few with the same urgency or resources." He warned that while shipping will retain its lead regarding volume, it is likely to "lose its monopoly on trust" in the business world. "Other transport modes will be significantly reinforced where certainty matters most, and redundancy becomes a permanent, priced feature of the supply chain," he said. "The Strait will reopen. The assumption that it remains open for free will not return."
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