Dubai: The disruption around the Strait of Hormuz is exposing just how vulnerable global trade remains to a single chokepoint, with businesses now being forced to find costly alternatives as geopolitical tensions reshape shipping, energy and supply chains.
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For the UAE, the crisis is also putting its long-running strategy of building alternative ports, logistics networks and trade corridors to a real-world test.
Fahad Al Gergawi, Undersecretary at the UAE Ministry of Foreign Trade, said the country had spent decades preparing for precisely the kind of disruption now confronting global supply chains.
“The UAE has adopted a model that is different from the region – that is preparedness,” Al Gergawi said.
But he acknowledged the scale of the current challenge. “No one is anywhere used to a war being in the region directly to us,” he said, adding that periods of stress force countries to “look at different things from a different perspective”.
The UAE’s response, he said, has been to avoid putting all its dependence on one route or one mode of transport.
“The model of Dubai in the early 80s adopted a multi-model system of supply chain logistics that support businesses, but also focus on services,” Al Gergawi said.
The approach now includes ports, airports, logistics infrastructure, trade agreements and alternative corridors, including the UAE’s eastern coast.
“It’s not one way that you look at things,” he said. “You have to make yourself, as a system, as a country, as a nation, prepared for taking such decisions in short time and quickly.”
Routes under test
Farid Belbouab, Group CEO of Gulftainer, said the current crisis had demonstrated why having an alternative route is not simply a strategic advantage but increasingly a necessity.
“Resilience is about building multiple routes,” he said.
The UAE’s Khorfakkan port provides one such option, allowing cargo to bypass the Strait of Hormuz. But Belbouab cautioned against assuming that simply having another port solves the problem.
“You cannot pour concrete at the speed of a crisis,” he said.
The challenge, he said, is building an entire ecosystem capable of moving cargo when established routes are disrupted. “The port itself is not the only solution,” Belbouab said. “It’s about a network of an ecosystem.”
That means connecting ports to logistics parks, industrial facilities, roads and other transport links so cargo can be rerouted quickly.
Crisis costs
Karen Young, Senior Research Scholar at Columbia University’s Center on Global Energy Policy, offered a less reassuring picture of what that rerouting means for the wider global economy.
The current disruption is “rewiring and remapping” energy flows and trade routes, she said, but warned that the consequences would be particularly severe for weaker economies.
The market can find alternative ways to move goods, Young said, but that does not mean those alternatives will be cheap or reliable.
“The market will figure out ways to get things from place A to place B,” she said.
“But it doesn’t mean that the price stays the same or that the availability in different markets is consistent.”
Young said the crisis was demonstrating the importance of storage, alternative energy sources and the ability to switch between different fuels and transport systems. “This crisis is teaching us about volatility and about responsiveness,” she said.
Trade gets harder
The pressure is not limited to oil and gas.
Young said the disruption was slowing the movement of wider categories of goods across the region, with consequences for re-export markets stretching from Africa to the Middle East and North Africa and South Asia.
The cost of moving energy has also surged, she said, citing the increase in the daily cost of a journey between the Gulf and East Asia from around $40,000 to $1.3 million.
“These are the kind of changes that certainly are inflationary for all of our energy products,” she said.
The implication for Gulf economies is significant: alternative routes may reduce the risk of a complete supply-chain stoppage, but they do not eliminate higher freight costs, congestion or uncertainty.
Security problem
Florence Gaub, Director of the Research Division at the NATO Defense College, said the crisis also showed why trade could no longer be separated from security.
“The two worlds that seem to be disconnected for the longest time, they are connected, and they will continue to be connected,” she said.
The Strait of Hormuz is one example of how a strategic security issue can quickly become a global trade problem.
Gaub said the world could increasingly move towards relationships where countries continue trading despite serious political disagreements.
“I think we’re probably going to have some, call it ‘liquid alliances’,” she said. “I like to call it ‘frenemies’, where you continue to trade, but you actually don’t get along on other things.”
No easy reset
For smaller economies, North Macedonia’s Foreign Minister Timcho Mucunski said the answer was not to retreat behind economic barriers.
“The nations that succeed in the next five, 10, 15, 20 years will not be the nations that build the largest walls, but the nations that build the most resilient bridges,” he said. But the underlying challenge remains: countries need resilience without sacrificing connectivity.
“Resilience in no way means isolation,” Mucunski said.
Al Gergawi made a similar argument for the UAE, saying trade itself could help create the relationships needed to navigate geopolitical uncertainty.
“Interest is what brings people together, and trade is the hardcore part of that,” he said.
He pointed to the UAE-led Future Investment and Trade Partnership, launched with Switzerland, Singapore and New Zealand, as an effort by like-minded economies to navigate rising protectionism rather than wait for the global trading system to stabilise.
“Waiting is not an option for us,” Al Gergawi said. That approach is being tested now.
The current crisis has shown that alternative infrastructure can provide a buffer, but it has also exposed the cost and complexity of replacing established routes when geopolitical tensions disrupt them.
For the UAE, the question is therefore no longer whether alternative corridors are useful. It is whether the infrastructure, partnerships and regulatory systems built before the crisis can keep trade moving when the next disruption arrives.