Embedded Files
Helpful prior knowledge and learning objectives
Helpful prior knowledge and learning objectives
Helpful prior learning:
Section 1.1.1 The economy and you, which explains what an economy is and how it is relevant to students’ lives
Section 1.1.2 The embedded economy, which explains the relationship between the economy and society and Earth’s systems
Section 1.3.9 Power in the economy, which explains where power comes from and how it shapes economic relationships
Section 7.1.1 Global exchange as a system, which describes global exchange as a system with parts, relationships, functions and emergence
Section 7.1.2 History of global exchanges, which describes how global exchange systems have evolved over time, shaped by changes in technology, power, and environmental factors
Section 7.1.3 What moves across borders? which describes what flows across borders and explains how visible global flows are linked to less visible social and ecological effects
Section S.1 What are systems?, which explains what a system is, the importance of systems boundaries, the difference between open and closed systems, and the importance of systems thinking
Section S.2 Systems thinking patterns, which outlines the core components of systems thinking: distinctions (thing/other), systems (part/whole), relationships (action/reaction), and perspectives (point/view)
Section S.7 Network models, which explains how nodes and links form networks, and how a network's structure affects the speed of information flow and the power of the people or places within it.
Learning objectives:
describe the main physical chokepoints in global exchange systems, including maritime routes, energy infrastructure, and digital cables
explain why disruptions to physical chokepoints have unequal consequences for different countries and communities.
In early 2026, the United States and Israel attacked Iran and within days the Strait of Hormuz closed (Figure 1). Oil and gas tankers stopped moving through the narrow passage between the Persian Gulf and the Gulf of Oman. Fuel prices rose sharply around the world. In countries that import most of their food, bread and cooking oil became more expensive within weeks. Hospitals began to worry about diesel for generators. Farmers faced shortages of fertiliser. Millions of people who had never heard of the Strait of Hormuz felt its closure in their daily lives.
A chokepoint is a narrow physical point in a supply network where very large volumes of goods, energy, information, or food must pass. When a chokepoint closes or is disrupted, the effects spread far beyond that location. The global exchange system depends on a surprisingly small number of these points. Recognising them helps us understand a key weakness of the global economy.
Figure 1. Strait of Hormuz, a global maritime chokepoint (Credit: Google maps)
Why does the global trading system create these chokepoints?
Why does the global trading system create these chokepoints?
The global exchange system was built to move goods as cheaply and quickly as possible. Over many decades, firms and states made decisions to buy resources from the cheapest suppliers and use the shortest shipping routes. To further lower costs, many firms no longer hold much spare inventory, called buffer stocks, because it is expensive to store and hold materials or fuel. Instead, they rely on just-in-time production, depending on the smooth delivery of resources on a predictable and regular basis arriving shortly before they are needed. This is the opposite of just-in-case production, where firms keep extra stock ready in case of disruption. These just-in-time strategies to reduce cost of production have reduced the selling price of some goods for consumers, and increased the profits of many firms.
Figure 2. A warehouse worker checks inventory (stock) levels. Many firms hold little inventory to cut storage costs, leaving them more exposed to disruption
(Credit: StratfordProductions, licensed from Adobe Stock)
But the goals of cost efficiency and resilience are in tension with each other (Section 7.1.1). The more a system is optimised for normal conditions, the more fragile it becomes when something unexpected happens. This problem was apparent during the Covid-19 pandemic, when global trade slowed and many firms couldn't get the supplies they needed to continue running as before. Our global trade networks have enabled us to access more and different goods, potentially increasing resilience, but the pursuit of profit maximisation has led to firms, with the help of states, to create low-cost systems that are very vulnerable to disruption. These systems transmit shocks rapidly from one part of the world to another. Physical chokepoints are the most visible expression of these fragile systems.
What physical chokepoints shape global exchange?
What physical chokepoints shape global exchange?
Maritime chokepoints
Maritime chokepoints
Around 85% of the world's traded goods by volume travel by sea. This trade moves through a small number of maritime chokepoints, narrow sea corridors including:
The Strait of Hormuz (Figure 1), between Iran and Oman, carries roughly 20% of the world's oil and liquefied natural gas. It is the only sea exit to the rest of the world from the Persian Gulf.
The Strait of Malacca, between Malaysia and Indonesia, is the world's busiest shipping lane, carrying around 80% of China's oil imports.
The Suez Canal in Egypt carries about 12% of global trade by volume.
Bab el-Mandeb, between the Horn of Africa and Yemen, links the Red Sea to the Suez Canal route and carries around 5% of the world's maritime oil trade.
The Bosporus and Dardanelles, known together as the Turkish Straits, connect the Black Sea to the Mediterranean. They carry around 5% of the world's maritime oil trade, mostly from Russia and Central Asia.
The Panama Canal links the Atlantic and Pacific oceans and handles around 40% of US container traffic.
These maritime chokepoints are very difficult to avoid, and some have no viable alternative (Figure 3).
Figure 3. Six major maritime chokepoints that shape global trade
The same maritime chokepoint routes also carry food and fertiliser. More than half of internationally traded maize, wheat, rice, and soybean passes through at least one maritime chokepoint each year. These four crops are raw materials for much of what people eat: animal feed for meat and dairy, flour for bread and pasta, and oil for cooking and processed food. A disruption to their supply raises prices across the food system, from these key crops through to the processed foods made from them. Around 32% of global trade in one of the most widely used phosphate fertilisers passes through the Strait of Malacca alone.
Fertiliser adds another link between energy and food. Nitrogen fertiliser, one of the most widely used types, is manufactured from natural gas. When gas supplies are disrupted, fertiliser becomes more expensive to produce, even in countries far from the affected chokepoint. Farmers who depend on imported fertiliser then face higher costs, which can lead them to reduce or delay planting.
This means that a disruption to shipping raises food prices, not only fuel prices. The energy system and the food system are connected through the same narrow passages. A 2025 study in the journal Nature Communications modelled the economic effects of disruptions at major maritime chokepoints. It found that the annual economic costs run to billions of dollars, and that the losses fall hardest on the countries that can least afford them.
Energy infrastructure
Energy infrastructure
Sea routes carry most oil and gas, but pipeline infrastructure forms a parallel system with their own risks. Because a pipeline is fixed in one place, it is easier to attack than a ship at sea. For example, the Kirkuk-Ceyhan pipeline carries oil from Iraq to Turkey's Mediterranean coast for export around the world. Kurdish militants, who have fought for greater autonomy in the region for decades, have repeatedly attacked the pipeline. Each attack has shut down the flow of oil for days, cutting a large share of Iraq's export revenue and disrupting supply to buyers overseas.
The global fossil fuel system has been organised in ways that concentrate political and economic power in specific locations and infrastructure. Controlling a pipeline gives a country or a company the same kind of leverage over others as controlling a maritime chokepoint. Russia has used this leverage several times. In 2006 and 2009, it cut gas supplies to Ukraine during disputes over price and payment, which also reduced gas flows to parts of Europe. After invading Ukraine in 2022, Russia reduced and then largely stopped pipeline gas flows to Europe.
Figure 4. Route of the Kirkuk-Ceyhan pipeline from Iraq to the coast of the Republic of Türkiye. Note: route is approximate.
(Credit: Ibrahim et al., 2019)
Digital infrastructure
Digital infrastructure
Most people think of the internet as wireless. In fact, around 95% of international internet traffic travels through fibre-optic cables laid on the ocean floor. These cables carry financial transactions, cloud computing, government communications, and everyday internet use. They follow the same routes as oil tankers and cargo ships, through the same narrow straits.
The Red Sea corridor carries roughly 17 to 18% of the world's internet data between Europe, Asia, and Africa. When Houthi forces in Yemen attacked shipping in the Red Sea, they also damaged subsea cables. Three major cable systems were cut in early 2024 and repairs took close to six months. The 2026 Hormuz conflict has extended this further, halting a major new cable project in the Gulf and preventing repair ships from accessing damaged infrastructure. In late 2024, cables were also deliberately cut in the Baltic Sea in Northern Europe. The physical and digital economies share the same geography, the same chokepoints, and the same vulnerabilities.
Figure 5. Global undersea digital cable infrastructure. Click on the map to access a version to zoom in and out (Credit: Submarine cable map from Telegeography)
Who is harmed most when chokepoints fail?
Who is harmed most when chokepoints fail?
When a chokepoint closes, the consequences are uneven. Money, power, and a country's position in global exchanges all shape who is hurt most.
Countries that import most of their fuel and fertiliser face the biggest price rises, because they have little or no domestic supply of their own to fall back on. The Kiel Institute for the World Economy modelled the effects of the Hormuz closure on food prices around the world (Figure 6). In Zambia, food prices are projected to rise by over 30%. In Sri Lanka they are projected to rise by over 15%, and in Pakistan by over 11%. In the United States, the projected food price increase is less than 1%.
Figure 6. Projected food price increases in a sample of countries following a closure of the Strait of Hormuz
(Credit: Kiel Institute)
Even where price rises are similar, their effects are not. Food takes up a bigger share of a household's budget in lower-income countries, so the same rise in food prices hits families harder there. Within countries too, the people with the least money, the least storage, and the least political voice are always the first to lose access to what they need when supply chains break down. Chokepoint disruptions create social and humanitarian crises that fall hardest on those who already have the least.
What are firms and states doing to reduce chokepoint risk?
What are firms and states doing to reduce chokepoint risk?
Since the Covid-19 pandemic, some firms have tried to reduce their exposure to chokepoint disruptions. They have moved production closer to home or to trusted partners. This is known as reshoring, nearshoring, or friendshoring. Section 7.1.2 explains this shift as part of a wider change in the shape of globalisation.
But these strategies do not remove chokepoint risk on their own. Relocated production still depends on shipping routes, energy infrastructure, and digital cables. A factory moved closer to home still needs fuel, raw materials, and components that travel through chokepoints somewhere in the world. Reducing exposure to one chokepoint can simply shift the risk to another.
Activity 7.3.4
Activity 7.3.4
Concept: Systems, power
Skills: Research skills (information literacy), Thinking skills (critical thinking)
Time: varies, depending on the option
Type: Individual, pairs, or small group
Option 1: Data analysis practice
Time: 20 minutes
The table below shows projected food price increases for selected countries if the Strait of Hormuz remains closed, based on modelling by the Kiel Institute for the World Economy in 2026.
Country Projected food price increase
Zambia +30.7%
Sri Lanka +15.3%
Taiwan +12.5%
Pakistan +11.4%
India +10.7%
USA / EU well below the global average of +2.75%, likely under 1%
Answer the following questions. Check your answers using the accordion below, but try it yourself first.
Describe the overall pattern you see in this data. What do the most affected countries have in common? Is there a country in the table that does not fit this pattern?
The Strait of Hormuz is geographically far from Zambia. Explain, using what you have read in this section, why Zambia is projected to be the most affected country in food price terms.
A 10% rise in food prices affects people differently depending on how much of their income they spend on food. In a wealthy country, a household might spend 10% of its income on food. In a low-income country, a household might spend 60%. If food prices rise by 10%, calculate how much extra each household would need to spend, as a percentage of their total income, to maintain the same diet. What does this tell you about the distributional impact of chokepoint shocks?
The section states that chokepoint disruptions fall hardest on those who already have the least. Using the data above and your answers to questions 1 to 4, write two or three sentences explaining why this is the case.
Click on the arrow to show sample responses, but give it a go yourself first!
Most of the countries facing the largest price increases share two features: heavy dependence on imported energy and fertiliser, and limited financial reserves to absorb a shock. Many are lower-income countries with large agricultural sectors, particularly in Sub-Saharan Africa and South Asia, though the pattern extends beyond these regions too, including countries in Eastern Europe, the Caucasus, and Latin America that share the same underlying vulnerability: heavy reliance on imported energy and fertiliser inputs.
Taiwan is an exception. It is a wealthy, highly industrialised economy with a small agricultural sector, but it imports almost all of its energy, since it produces very little of its own. This shows that import dependence, not income alone, drives exposure to a chokepoint shock. Income mainly affects how well a country can absorb the shock once it hits.
Zambia is far from the strait but depends on imported fertilisers manufactured using Gulf natural gas. When the strait closes, fertiliser supply is disrupted and prices rise globally. Zambia's agriculture depends on these imported inputs and the country has limited financial capacity to pay higher prices or find alternatives quickly.
Extra income needed = price rise × share of income spent on food.
Wealthy household: 10% of income spent on food. Extra income needed = 10% (price rise) × 10% (share of income) = 1% of total income.
Low-income household: 60% of income spent on food. Extra income needed = 10% (price rise) × 60% (share of income) = 6% of total income.
This shows that the same price rise is six times more burdensome for the low-income household in proportional terms, and may be simply unaffordable, forcing families to reduce what they eat.
Sample answer: chokepoint disruptions fall hardest on countries that depend most on imported energy and fertiliser, which tend to be lower-income countries with fewer alternatives. Within those countries, the poorest households spend the largest share of their income on food, so a price rise hits them proportionally harder. They also have the least capacity to stockpile food, access credit, or switch to alternatives, meaning a disruption can quickly become a question of access rather than affordability.
Option 2: Whose crisis is it? Perspectives on chokepoint disruption
Time: 40 minutes
When chokepoints fail, the consequences are not shared equally. This activity asks you to explore the impact of the 2026 Hormuz closure from different perspectives. All of the situations below are based on real people's experiences reported in April 2026 in The Guardian.
There are several ways to run this activity, which uses perspective cards to help students understand how people are affected differently by the Strait of Hormuz closure, for example:
You could set up groups of six students, each student with a perspective card and keep the discussion in that small group.
You could set up six small groups, give each group a perspective card to discuss and then open up the discussion and comparison of perspectives to the whole class, or have one person from each group form new groups with others with different perspectives to compare and discuss (jigsaw format).
You could ask individuals, pairs, or small groups students to choose two perspectives and do a comparison.
Part A: Perspective cards — Read and discuss your case (see perspectives cards below) (15 minutes)
Questions to consider:
How is this person's daily life affected by the Hormuz closure? Is the impact immediate and severe, or more gradual and manageable?
Does this person have any power to change their situation? What options do they have, and what limits them?
What does their situation tell us about how this crisis is travelling through the global economy?
Part B: Share and compare (5 minutes)
Each person or group shares a brief summary of their case with the class. As you listen to the other cases, note: what is the biggest difference you see between your situation and the situations of others?
Part C: Whole class discussion (15 minutes)
Each person or group has now heard all the cases. Using what you have shared and compared, discuss the following question together:
To what extent did the Strait of Hormuz closure create these differences in how people are affected, or did it reveal and amplify differences that were already there?
Think about: what each person had access to before the crisis: savings, alternative fuel sources, government support, the ability to raise prices or change jobs. Did the crisis change those things, or did it make them matter more?
Part D: Reflection (5 minutes, individual)
Write two or three sentences responding to this question: the section says that chokepoint shocks amplify existing inequalities. Based on the perspectives discussed, do you agree? Use at least one specific example from the discussion.
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Perspective cards
A — A dairy farmer in New Zealand You milk 200 cows on a farm north of Auckland. Your tractors and machinery run on diesel, and you use around 900 litres a month. Since the Hormuz closure, diesel prices have risen sharply and fertiliser costs have gone up 40%. Your extra costs now total around NZ$1,250 a month. You cannot pass these costs on to anyone. You are thinking about delaying maintenance on the farm and cutting back on investment. The cows still need to be fed, so you cannot simply stop using fuel.
B — A bus driver in Vanuatu You drive your bus through Port Vila from 6am to 9pm and earn around A$120 a day. When fuel prices rise, your daily income could fall to A$70, which may not be enough to cover your loan repayments. Your bus must run with air conditioning because temperatures reach 30 degrees. Your only option to survive is to raise fares, but passengers are already struggling with higher prices. You feel caught between your costs and your customers.
C — A public sector worker in South Korea Since late March, the government has imposed vehicle restrictions on public sector workers. You now take the bus to work every day even on days you are allowed to drive, because fuel prices have risen so much. The government has launched a 12-point energy-saving campaign asking citizens to take shorter showers, charge phones during the day, and do laundry on weekends. You think these measures are manageable and feel that the country can get through this crisis if citizens and government work together.
D — A mobile grocery vendor in Thailand You start work at midnight and sell meat, vegetables, and food at villages across Surin province. Diesel is very hard to find. Some days you stop at three petrol stations and can only get a small amount at each. If you cannot fill your tank, you cannot go out and sell. Your profits are down around 20%. Prices at the market where you buy your goods have risen, and deliveries are unreliable. You have had to raise your own prices even though you did not want to. You are not sure how long you can continue.
E — A warehouse worker in Delhi You have worked at a large warehouse for five years, earning around 12,000 rupees a month. Since mid-March, the cost of cooking gas has nearly quadrupled. Your rent has gone up. You have borrowed money from a friend to get through the month. For two weeks you have been eating one meal a day. At work you sometimes feel dizzy. You are waiting two more weeks to see if things improve. If they do not, you will go back to your family in Uttar Pradesh.
F — A taxi driver in Beijing When you heard that fuel prices would rise, you rushed to queue at the petrol station with many other drivers. The government capped the fuel price increase at around half of what it would have been, to ease the burden on ordinary people. You are not happy about higher prices, but you trust the government to manage the situation. China imports a lot of oil from Russia as well as other sources, and is investing heavily in electric vehicles and clean energy. You think China will not face a big energy crisis. You are considering switching to an electric vehicle, or perhaps leaving the job altogether in a year.
G — A bathhouse owner in Tokyo You are the third generation of your family to run a public bathhouse in Kita Senju. Most bathhouses use oil to heat their water, but you switched to gas five years ago. Heating costs have already been rising for other reasons, and you expect gas prices to climb further if the war in Iran continues. The bathing fee is set by the Tokyo city government, so you cannot raise it yourself, even if your costs go up. You receive a government subsidy, but your customers are mostly older and few in number, and some other bathhouses are weighing whether to close. The crisis has not reached you yet, but you are bracing for it.
H — An interior designer in Sydney You work in interior design, and your husband works in construction. When international tensions rise, building work is often one of the first things people cut back on, so you both feel it quickly, even though neither of you uses much fuel directly. You are applying for other jobs, including remote work, and spending more on marketing to try to keep the clients you have. At home, you are cutting costs and thinking twice before driving anywhere that is not essential, such as your children's swimming lessons. You check the news every day because you do not know how long this will last.
Ideas for longer activities and projects are listed in Subtopic 7.5
Checking for understanding
Checking for understanding
Coming soon!
Further exploration
Further exploration
A day in the life of Asia’s fuel crisis - An article from The Guardian with first-hand accounts of how the fuel crisis from the US/Iran war has affected people on the ground in Asia. Difficulty level: easy
Strait of Hormuz: war, oil and the cost of living - A lesson plan from The Economist about the oil supply chain and how the closure of the Strait of Hormuz affects the prices of many things in the economy. Difficulty level: easy
Sources
Sources
Bailey, R., & Wellesley, L. (2017). Chokepoints and vulnerabilities in global food trade. Chatham House. https://www.chathamhouse.org/2017/06/chokepoints-and-vulnerabilities-global-food-trade
Better World Campaign. (2026, March). From barrels to bandwidth: A new chokepoint is emerging in the Gulf. https://betterworldcampaign.org/peace-and-security/from-barrels-to-bandwidth-a-new-chokepoint-emerges-in-the-red-sea
Corlett, E., Malsungai, A., Rashid, R., Hawkins, A., McCurry, J., Burke, K., & Ellis-Petersen, H. (2026, April 3). A day in the life of Asia's fuel crisis. The Guardian. https://www.theguardian.com/world/2026/apr/03/asia-fuel-crisis-iran-war-ordinary-workers?CMP=Share_iOSApp_Other
Dash, S. (2026, March 20). Chokepoints and chains. Foreign Policy in Focus. https://fpif.org/chokepoints-and-chains/
Hinz, J., Mahlkow, H., Sogalla, R., & Willmann, G. (2026). The cost of closing the Strait of Hormuz: Energy bottlenecks and global food security (Kiel Policy Brief No. 206). Kiel Institute for the World Economy. https://www.kielinstitut.de/fileadmin/Dateiverwaltung/IfW-Publications/fis-import/03f6ac6f-5c1e-4374-a169-9070d4732d8c-KPB_206.pdf
Ibrahim, R., Kadhim, M., & Al-Mufti, A. (2019). An overview on the recent techniques for improving the flowability of crude oil in pipelines. IOP Conference Series: Materials Science and Engineering, 579(1), Article 012054. https://www.researchgate.net/publication/335209024_An_Overview_on_the_Recent_Techniques_for_Improving_the_Flowability_of_Crude_Oil_in_Pipelines
Submarine Networks. (2026, March). War in the Gulf severs the world's digital arteries: How the Iran conflict is reshaping global connectivity. https://www.submarinenetworks.com/en/nv/insights/war-in-the-gulf-severs-the-world-s-digital-arteries
The Economist. (2021, March 26). Why the Suez Canal and other choke-points face growing pressure. https://www.economist.com/the-economist-explains/2021/03/26/why-the-suez-canal-and-other-choke-points-face-growing-pressure?utm_medium=cpc.adword.pd&utm_source=google&ppccampaignID=18151738051&ppcadID=&utm_campaign=a.22brand_pmax&utm_content=conversion.direct-response.anonymous&gclsrc=aw.ds&gad_source=1&gad_campaignid=18151761343&gbraid=0AAAAADBuq3L_9TkWATa0ctCSl0Zu5MlRm&gclid=Cj0KCQjwiJvQBhCYARIsAMjts3LC9kSvKcX4SOPm5VlTKMY3x11eiOFONa7gPqcaN7cuYys-Q0ZgEPQaAg2VEALw_wc
The Economist. (2026, March 26). Hormuz is not the only weak spot for global trade. https://www.economist.com/briefing/2026/03/26/hormuz-is-not-the-only-weak-spot-for-global-trade?utm_medium=cpc.adword.pd&utm_source=google&ppccampaignID=18151738051&ppcadID=&utm_campaign=a.22brand_pmax&utm_content=conversion.direct-response.anonymous&gclsrc=aw.ds&gad_source=1&gad_campaignid=18151761343&gbraid=0AAAAADBuq3L_9TkWATa0ctCSl0Zu5MlRm&gclid=Cj0KCQjwiJvQBhCYARIsAMjts3I7ZQUQQRMAhTlDIgc8mu-PSO59EwTmoibaPqx7JRjmnHbH0g_dz2YaAhasEALw_wcB
Verschuur, J., Lumma, J., & Hall, J. W. (2025). Systemic impacts of disruptions at maritime chokepoints. Nature Communications, 16, Article 10421. https://doi.org/10.1038/s41467-025-65403-w
Terminology
Terminology
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