BIG READ: Middle East conflict reaffirms that whoever rules the waves rules the world

There’s an old saying that runs deep in the history of world trade and which has never lost its validity: whoever rules the seas rules the world. That remains as true today, as it has for centuries. There are, of course, important caveats, historical, political economic, military, social and industrial contexts that can help us better understand that old saying.

A better understanding emerges if we untangle the knot of caveats by reflecting on the current phase of the decades-long war between the Palestinians and Israel, place it in the context of how war has historically been extended from land to sea, and what this expansion may mean beyond the conflict in western Asia.

Because of cultural, political or ideological solidarities the current phase of the conflict in Palestine could be expanded westwards, drawing in parts of North Africa, and eastwards, sucking in Gulf states, including Iran. Should this happen, it would place a stranglehold on at least two important choke points in global maritime trade routes.

The Suez Canal, the Hormuz Strait and the Bab el-Mandeb Strait (between Africa and western Asia) are among the most important, and busiest, choke points on maritime trade routes. Other choke points include the Malacca Strait, Gibraltar and the Panama Canal.

Any blockage of Hormuz will have an almost immediate effect on global trade, especially trade in petroleum and liquefied petroleum gas (LPG). An estimated 20% of global petroleum, about 21-million barrels, or $1.2bn worth of oil, pass through Hormuz every day. The littoral (coastal) states in the Gulf ship most of their crude through Hormuz. Qatar, which has the world’s largest (known) reserves, ships almost all its LPG through the Hormuz.

With respect to global trade and maritime passages through the Suez Canal and Bab el-Mandeb, it’s difficult to say precisely what the value is, given daily fluctuations, but the World Bank has estimated that 12% of global trade and 30% of the world’s shipping container traffic pass through Suez — an average of 50 a day — carrying up to $9bn worth of cargo.

Not quite the sideshow that it might be perceived as, given the immediacy and focus of the current conflict, it is worth thinking beyond the immediate, and place on record Chinese and Indian claims and threats to the Malacca Strait that run between Indonesia and Malaysia (past Singapore) as part of their global focus of geostrategic, trade and maritime political economic “interests”. We can return to that later.

Trade and warfare

Geostrategic threats to maritime space, and to global trade, in general, are not unique to current politics, nor are they unique to western Asian littoral states. This takes nothing away from the importance, and the clear and present danger of the expanding scope of the war in Palestine. The threats to maritime trade, and blocking Red Sea access to European markets, have gained interest among Western leaders.

Shortly after Hamas’s attack on Israel on October 7, Reuters reported that the Marshall Islands registry, one of the world’s main shipping flags, warned that vessels with links to the US or Israel may face a heightened threat of attack within Israeli territorial waters, the Gulf, Hormuz Strait, the Gulf of Oman and Red Sea areas.

The Financial Times reported in October: “A broadening of the conflict, however, would change the equation. [Oil] supply could be hit if the US were to strictly enforce restrictions on Iranian oil exports or if the conflict between Israel and Hamas led to disruption in the Hormuz Strait, a big oil choke point.” The West is especially concerned about Hormuz. Blocking the passage of oil through the strait “would send the global economy into a tailspin”.

Maritime warfare has a deep history, and the current conflict draws our specific attention to events of our generation — especially the Gulf. Conflict on the seas in the Gulf has marked the region for the past 40 years or so. During the Iran-Iraq war (1980-1988), the two sides sought to disrupt each other’s oil exports in a tanker war. In July 1988, the US warship Vincennes, “accidentally” shot down an Iranian airliner, killing all 290 passengers. In July 2010, Japanese oil tanker M Star was attacked in the Hormuz Strait by militant group Abdullah Azzam Brigades, linked to al-Qaeda.

In January 2012, Iran threatened to block the strait in retaliation for US and European sanctions that targeted its oil revenue in an attempt to stop Tehran’s nuclear programme. In May 2015, Iranian ships seized a container ship in the strait and fired shots at a Singapore-flagged tanker, which Tehran claimed had damaged an Iranian oil platform. In July 2018, President Hassan Rouhani hinted that Iran could disrupt oil trade through the strait in response to US calls to reduce Iran’s oil exports to zero.

In May 2019, four vessels — including two Saudi Arabian oil tankers — were attacked off the United Arab Emirates (UAE) coast near Fujairah, one of the world’s largest bunkering hubs, just outside the Hormuz Strait. In January 2021, Iran seized a South Korean-flagged tanker in Gulf waters and detained its crew. In May 2023, Iran seized two oil tankers that were passing through Hormuz. A month or so later, the US Navy reported that it had prevented Iran from seizing two commercial tankers in the Gulf of Oman.

We may turn, briefly, to the implications for SA and the developing world in general. First, according to the World Bank’s research on global and shipping costs, maritime transit delays and bottlenecks can be detrimental to poorer countries, and trade flows in general. Poor countries, notably in Africa, have poor shipping connectivity, inadequate logistics infrastructure and services that compound existing problems, notably with revenue collection, which is vital for domestic investment in education, healthcare or sanitation.

The week-long blockage of the Suez Canal after the Ever Given, a container ship, ran aground in the canal was a strong reminder of the critical role of shipping in global trade. The blockage showed that for wealthy countries, poor logistics are more important sources of trade costs than geographic distance, whereas trade costs were higher in poor countries lacking shipping connectivity and logistics.

Let us keep in mind, then, the perceived or actual threats to the Hormuz Strait and Suez Canal with a reminder of approaching tension in the Malacca Strait, without forgetting that maritime expansion is important for asserting control and dominance. The history of European expansion across the seas, surely the most aggressive and far-reaching in the modern era, has demonstrated that whoever controls the seas, controls the world.

The English knew this in 1651, when the first Navigation Act was published. An Englishman (cited by Charles Wilson in Profit and Power in 1957) said that “whatever nation soever can attaine and continue to keep the Sovereign of the Seas, and consequently the greatest Dominion of the World”.

The British historian Michael Howard detailed that by the 15th century “war at sea was an extension of war at land”. For the English aristocracy “Protestantism, patriotism and [transoceanic] plunder became virtually synonymous”. For the Spanish conquistadores, “profit, adventure glory, salvation, above all, land [across the seas in the Americas] now beckoned”, and once they have “taken the Cross and learned to sail”, they “conquered [parts of the Americas] less because of any superiority in weapons over indigenous populations, than because of their arrogant self-confidence … their toughness and fanaticism”.

In 1936, Oxford historian Richard Pares wrote, in War and Trade in the West Indies, 1739-1763, that British merchants believed it was most important to continue in a state of war, and that if war “is carried on only by sea, than in a state of peace … our commerce in general will flourish more under a vigorous and well-managed naval war”.

Unless you believe that the present is permanent, that everything currently happening is all that matters or that it alone explains the present and the future, it is clear that the sea is an important part of any and probably all competition in global political economy and strategy.

Today’s and tomorrow’s challenges

Let us cast our gaze eastwards to get a more global political economy view. In terms of the volume of trade that passes through the Malacca Strait, Indonesia, Malaysia and Singapore face serious long-term threats. An estimated $3-trillion worth of trade travels south across the South China Sea, and it has to pass through Malacca on its Westward passage or else veer thousands of kilometres (off course) through the Lesser Sunda Islands of Indonesia, South of Borneo and Sulawesi, before turning west and then north to India or though Bab el-Mandeb to the Suez Canal.

This would increase transport costs as well as expose maritime vessels to piracy in the Indonesian archipelago. This is on top of the high risk of recurrent pirate attacks in Bab el-Mandeb.

Because of the traffic from China to Indian ports, or vessels that go directly to Suez bound for Europe, the Malacca Strait (the shortest maritime route between China and India) has become part of Beijing’s strategic objectives. The Chinese know that Malacca is a vital link between the South China Sea with the Indian Ocean. Malacca carries about 40% of the world’s trade. Almost 100,000 vessels pass through the strait, which, at its narrowest is about 3km. China’s latest attempts to secure the Malacca Strait are an echo of Portuguese, Dutch and British conflicts over control of the waterway since the 15th century.

In the specific context of the present conflicts in western Asia, Hormuz, the Suez Canal and Bab el-Mandeb are in a geographic band that runs from Egypt eastwards to the southern shore of Iran. These passages are geographically concentrated, in a manner of speaking. Without traducing the current phase of violence on the eastern shores of the Mediterranean, it would help to understand the historical and political ambitions of warfaring societies to extend control and domination to the seas. It also asks us to consider whether human life is more important than global trade.

There is a cruel irony that, as the Financial Times reported, “even after Israel’s demand for people to leave northern Gaza”, markets remained relatively unmoved. The human tragedy has had “no immediate impact” on global oil production and it is unlikely to “trigger a substantial surge” in the oil price. This is not to say that there has not been a rise in prices, but the human tragedy seems not to have the power to move markets that “oil” does. The “markets” will respond unfavourably when “sea routes” (through Hormuz, the Suez and Bab el-Mandeb) are disturbed.

In terms of the likely effect on SA, if the current conflict in western Asia causes the shutdown of Hormuz, Bab El-Mandeb and the Suez Canal, container ships headed to Europe may be diverted around the tip of Africa. The ports of Durban and Cape Town, which may have to rapidly prepare stocks, fuel, maintenance, administration and communications infrastructure, would need upgrading or at last preparation.

Setting aside the added distance of travelling around the Cape, (and bearing in mind that about 60% of SA trade goes through the Durban port) the country’s ports have already been exposed as inefficient, and quite unable to deal swiftly with large volumes of vessels and goods. It is foolish, then, to believe that the war in Palestine does not have potentially vital threats to global and SA maritime trade.

In the final analyses, it all comes down to power. The renowned English historical figure, Walter Raleigh, said (about 500 years ago): “For whosoever commands the sea, commands the trade, whosoever commands the trade of the world commands the reaches of the world and consequently the world itself.”

• Lagardien, an external examiner at the Nelson Mandela School of Public Governance, has worked in the office of the chief economist of the World Bank as well as the secretariat of the National Planning Commission.