Global trade security ablaze amid waves of fire

One month into the conflict involving the United States, Israel, and Yemen, the foreign ministers of Pakistan, Saudi Arabia, Egypt, and Turkey convened in Islamabad on March 29, 2026. The high-level quadrilateral meeting focused on the escalating Middle East war amid intensive mediation efforts led by Pakistan between the U.S. and Iran.

Pakistani Foreign Minister Ishaq Dar said the discussions covered “a range of issues, including concerted efforts to defuse regional tensions” that had pushed the globe to the brink of an economic catastrophe.

The stranglehold on global shipping

The conflict sent marine insurance premiums soaring, particularly for vessels attempting to navigate the Strait of Hormuz — a vital artery for global commerce that was under blockade by Iran.

Since the outbreak of hostilities against Iran on February 28, insurers issued war-risk “notices of cancellation”, a step that allowed firms to reassess extreme volatility before reinstating coverage under drastically modified — and often far more expensive — terms.

The cost of passage

In London, the world’s premier marine insurance hub, officials reported widespread avoidance of the route. The Lloyd’s Market Association (LMA) clarified that “security concerns, rather than insurance availability,” were curtailing maritime traffic.

• Before the war, war-risk insurance typically cost less than 1% of a vessel’s value.
• After hostilities escalated, a single transit through the Strait of Hormuz could cost tens of millions of dollars.

Navigation paralysis

Maritime traffic through the Strait effectively came to a halt. Data from the tracking firm Kpler indicated that between March 1 and March 26, traffic plunged by 95% compared to pre-war levels.

This chokepoint normally facilitated the passage of:

• roughly 20% of the world’s crude oil and LNG, and
• about 33% of global fertilisers (including sulphur and ammonia), vital for food security in major importing regions.

Major carriers, including Denmark’s Maersk and France’s CMA CGM, suspended transits through both the Strait of Hormuz and the Suez Canal. Vessels were forced to circumnavigate Africa, adding thousands of miles and weeks of delay to global supply chains.

Energy security on the brink

The head of the International Energy Agency (IEA) warned from Canberra, Australia, that the world was facing the most severe energy crisis in decades — surpassing the 1970s oil shocks.

“To date, we had lost 11 million barrels per day. This was more than the losses of the 1973 and 1979 oil crises combined, which totalled 10 million barrels per day,” the IEA chief said.

Economic fallout

At the annual “CERAWeek” conference in Houston, energy leaders warned that the crisis extended far beyond the gas pump:

• Industrial impact: Patrick Pouyanné, CEO of TotalEnergies, warned of a shortage in helium, a critical component for the semiconductor and medical supply industries.
• Reconstruction costs: A study by Rystad Energy estimated the minimum cost to repair damaged energy infrastructure at $25 billion, a figure that was expected to climb.
• Escalation risks: Tensions spiked following threats to target civilian power and water grids in the Gulf. Analysts warned that mutual strikes on infrastructure would paralyse global markets indefinitely.

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