From Hormuz to Panama: Maritime Shipping Becomes the New Geopolitical Battleground
Virginia Pietromarchi
Experts warn that the rules-based maritime order is being dismantled as major powers—from the US and Iran to China and Russia—use shipping as a tool of coercion, driving up costs and exposing global trade to unprecedented risks. Incidents from the Strait of Hormuz to the Panama Canal highlight a shift from predictable norms to power-based access, threatening higher insurance, fuel, and compliance costs while non-state actors further exploit gaps.
When Indonesian Finance Minister Purbaya Yudhi Sadewa proposed a fee for ships transiting the Malacca Strait—inspired by Iran's moves in the Strait of Hormuz—it sent alarm bells through insurance firms and Asian importers. Though Indonesia quickly withdrew the proposal, the episode underscored a mounting reality: the once-rules-based maritime order has become more dangerous, expensive, and politicized than ever.
“We have never seen the oceans as chaotic and dangerous as they are now,” said Elisabeth Braw, a senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council, noting this is the case since “nations came together to set the rules of the game” decades ago.
Shipping, historically threatened by pirates and privateers, evolved after World War II through a series of treaties and agreements designed to keep oceans safe and ensure freedom of navigation. That framework enables more than 80% of global trade cargo to move by sea, helping trade value jump from $60 billion in the 1950s to over $25 trillion last year, according to the WTO.
But now, actions by major players—from the US and Iran to Russia and China—are threatening to tear up the rules that have helped ships navigate turbulent waters, experts say.
Hormuz Battleground
At the Strait of Hormuz, Iran restricted shipping from early March after the US and Israel launched a campaign against it. On April 13, the US imposed a naval blockade on Iranian vessels and ports. Since then, the US has seized Iranian ships near the strait and boarded others in the Asia-Pacific on suspicion of carrying sanctioned Iranian oil. In response, Iranian forces have detained ships they say crossed Hormuz without permission and even fired on some vessels.
These tit-for-tat actions have exacerbated the global energy crisis, pushing oil and gas prices to multi-year highs. “Even without a full closure, permission-seeking and pressure tactics can inflict heavy costs and uncertainty,” said Jack Kennedy, MENA Country Risk Director at S&P Global Market Intelligence. He cited an incident where a container ship was fired upon by a vessel linked to Iran’s Revolutionary Guard, causing severe damage to the bridge, as “a calculated show of control.”
Panama Canal Also Affected
On April 14, the US and several South American and Caribbean nations issued a joint statement accusing China of “targeted economic pressure” and “interfering with ships flying the Panama flag.” They alleged China had detained a Panamanian vessel in port, calling it “an effort to politicize maritime trade and violate sovereignty.”
China rejected the accusations, accusing the US of hypocrisy. Foreign Ministry spokesman Lin Jian said: “Who long occupied the Panama Canal and invaded Panama militarily? Who covets this canal and wants to turn it into their own territory? The answer is obvious.” The incident came three months after Panama’s Supreme Court canceled the operating contract for the Balboa and Cristobal ports held by a Hong Kong-linked firm, amid US pressure to curb Chinese influence around the canal.
Scale of Change
Most of the legal maritime framework still supports routine trade, but experts warn that exceptions are multiplying. In the Black Sea, Russia restricts Ukrainian exports, causing a global food shock and showing how naval control can impose economic pressure far beyond a war zone. In the South China Sea, China is accused of harassing commercial vessels to enforce its territorial claims, though Beijing denies this.
“Actions at sea have always been a way to put pressure on the economy and military of an adversary—nothing new, but the scale has changed: the number of containers, the size of the global fleet,” said Jean-Paul Rodrigue, a professor at Texas A&M University. Non-state actors like the Houthis in the Red Sea have also forced shipping lines to reroute via the Cape of Good Hope.
Risk Lies in Precedent
Experts say these developments signal a shift from a predictable, rules-based maritime order to a system where access, cost, and security are governed by power and political calculation rather than shared norms. Non-state actors are also exploiting gaps: the International Chamber of Shipping reports 2025 recorded the highest number of piracy attacks in five years.
Geopolitical impacts are translating into real operational decisions: diverted ships consume more fuel and time, pushing costs higher. War-risk insurance premiums are rising, and compliance procedures are tightening. Even short inspections or detentions disrupt supply chains. “The risk lies in the precedent created as more countries test the boundaries—through permits, selective enforcement, or threats to levy fees on international straits. Then the outcome depends on negotiation and power,” Kennedy of S&P Global concluded.
