Disruption in the Strait of Hormuz has been a blunt demonstration of how quickly instability in a narrow maritime corridor can ripple across the global economy. Within days, shifts in shipping patterns, rising insurance costs, and delays in cargo movement began to feed into broader concerns about global energy supply and price volatility.
For policymakers and businesses, the episode is a reminder of how much the modern economy depends on the uninterrupted flow of goods through a handful of strategic chokepoints.
Hormuz is among the most visible of these. Roughly one-fifth of global oil consumption and around 20% of liquefied natural gas trade pass through the strait, making it a critical artery for energy markets. When disruption occurs, the effects are immediate and widely understood. Yet the global system relies on other chokepoints that are no less consequential.
Stretching between Taiwan and the China mainland, the Taiwan Strait serves as a primary maritime corridor linking East Asia with global markets. Nearly half of the world’s container fleet transits these waters each year, carrying goods that underpin manufacturing supply chains across industries. Trade valued in the trillions of dollars moves through the Taiwan Strait annually, reflecting its central role in connecting production hubs in East Asia with consumers worldwide.
Unlike Hormuz, the importance of smooth navigation through the Taiwan Strait is not limited to just a few types of products. Rather, its significance lies in the diversity and complexity of the goods that pass through it — including, critically, shipments originating in East Asia and moving westward to destinations in Europe and other markets.
Taiwan is not alone in the potential impact. Japan and Korea are also major trading nations whose economies are vitally dependent on shipments heading in both directions through the Taiwan Strait and the South China Sea.
The wider lesson of the crisis in the Persian Gulf has not been lost on prominent observers. In a recent Substack, for example, Nobel Laureate economist Paul Krugman wrote that “if the Hormuz crisis seems bad, think about the disruption to global supply chains if China were to attack Taiwan or if North Korea were to attack South Korea.” Joseph Bosco, former China country director in the U.S. Defense Department, made a similar argument in an article, “Iran and Taiwan: a Tale of Two Straits,” for the The Hill.
Notably, Taiwan is a leading center of global production of tech products. Although most of the semiconductors made in Taiwan, which include the vast majority of the world’s advanced chips, are likely shipped by air, many of the end-products containing those components rely on secure sea lanes through the region.
Ensuring the continued stability of key maritime corridors is not solely a regional concern, but a shared economic interest among all countries heavily involved in international trade. The disruption in the Strait of Hormuz has provided a timely reminder of how vulnerable concentrated systems can be. It should also prompt wider recognition that the functioning of the global economy depends just as much on stability in the Taiwan Strait.
