The world is rediscovering chokepoints and they are not just geographic

As Middle East tensions rise, the Strait of Hormuz has again become a focal point for policymakers and markets. Roughly one-fifth of globally traded oil passes through that narrow waterway. Any disruption reverberates immediately through global energy prices and, ultimately, the wallets of American consumers.

But focusing solely on Hormuz risks missing the bigger picture. The real story of the global economy in 2026 is not a single chokepoint. It is the proliferation of chokepoints: across geography, infrastructure, industry and even the digital world. These bottlenecks form the hidden architecture of the global economy. And increasingly, they are becoming the terrain on which economic competition and geopolitical rivalry are fought.

For decades, globalization was built on efficiency. Supply chains were optimized to reduce costs, often by concentrating production in a small number of locations and routing goods through the fastest and cheapest pathways. That system delivered lower prices and unprecedented economic integration.

But it also created vulnerabilities. More than 80 percent of global trade still moves by sea, and a significant share of it passes through a handful of narrow passages. The Strait of Malacca links the Indian and Pacific Oceans and carries the bulk of energy shipments to East Asia. The Suez Canal is a critical artery for trade between Europe and Asia, as the world was reminded when a single grounded container ship blocked it in 2021. The Panama Canal remains essential for U.S. trade flows between the Atlantic and Pacific, even as water shortages increasingly constrain its capacity.

These are not just geographic features. They are strategic pressure points. Disruption no longer requires a formal blockade. Insurance premiums, cyber interference, drone attacks and gray-zone tactics can all achieve similar effects at far lower cost.

Yet the most important chokepoints today are not always visible on a map. Consider industrial capacity. The global economy depends on highly concentrated production nodes that are difficult to replicate. Advanced semiconductor manufacturing is dominated by a handful of facilities in Taiwan and South Korea. The most sophisticated chipmaking equipment is produced by a single company in the Netherlands. Rare earth processing is overwhelmingly concentrated in China.

These are chokepoints in the truest sense: If they fail, entire sectors stall. This is why export controls, investment screening and industrial policy have become central tools of U.S. strategy. The competition with China is not just about tariffs or trade balances; it is about control over the bottlenecks that enable modern economies to function.

Energy systems provide another layer of vulnerability. While the United States has achieved a degree of energy independence, global markets remain tightly interconnected. Liquefied natural gas exports depend on a limited number of terminals. Key pipeline routes still shape regional energy security.

Then there are the invisible systems. Around 95 percent of global data travels through undersea cables laid across the ocean floor. Cloud computing infrastructure is concentrated in a small number of firms and locations. Satellite systems support everything from navigation to financial transactions. These digital networks are rarely discussed in traditional national security debates, yet their disruption would be as consequential as the closure of any canal or strait.

Even finance has its chokepoints. The dominance of the U.S. dollar, the centrality of Western financial institutions and the role of systems such as SWIFT give Washington enormous leverage. Sanctions have demonstrated that access to the global financial system can be restricted as effectively as access to a physical trade route.

Taken together, these chokepoints reveal a fundamental shift in how power operates in the global economy. In the 20th century, geopolitical competition was largely about territory — who controlled land, resources and sea lanes. In the 21st century, it is increasingly about control over flows: of goods, energy, data and capital. The actors that can secure, disrupt or redirect those flows hold disproportionate influence.

This has profound implications for U.S. policy. First, resilience must become as important as efficiency. The pursuit of the lowest-cost supply chain has left the United States and its allies exposed to disruption. Diversification, through nearshoring, friend-shoring and domestic investment, is no longer just an economic choice. It is a strategic imperative.

Second, alliances matter more than ever. No country can eliminate its exposure to chokepoints entirely. But by working with trusted partners, the U.S. can build redundancy into critical systems and reduce dependence on adversarial actors.

Third, policymakers must reexamine what constitutes critical infrastructure. Ports and pipelines remain vital, but so too are semiconductor fabs, data centers, undersea cables and mineral processing facilities. Protecting these assets requires a combination of regulation, investment and, in some cases, defense planning.

Finally, the U.S. must recognize that chokepoints are not just vulnerabilities. They are also sources of power. The ability to shape access to key technologies, financial systems and supply chains provides leverage in an increasingly competitive world.

The lesson of the Strait of Hormuz is not simply that narrow waterways matter. It is that the global economy is far more dependent on chokepoints than we once believed, and that those chokepoints are multiplying. Ignoring them would be a mistake. Understanding them may be the key to navigating the next phase of strategic competition.

 

* Duncan Wood is a fellow at the Wilson Center and CEO of Hurst International Consulting.

 

Source: https://thehill.com/opinion/international/5802007-global-economy-chokepoints-2026/