Oil displaced from a shuttered Strait of Hormuz is piling pressure on five other chokepoints. Bab el-Mandeb traffic has roughly doubled into a Houthi blockade, Panama is rationing vessel draft as drought drains Gatun Lake, and volumes through the Strait of Malacca have fallen even though nothing is blocking it directly.
Brent crude traded around $91.62 and WTI near $85.56 on Wednesday, and much of that premium reflects the cost of rerouting barrels that can no longer move through the Strait of Hormuz. Crude and liquids transiting Hormuz fell to 4.9 million barrels a day in the second quarter of 2026, down from 21.6 million in the fourth quarter of 2025, after the strait was effectively closed by the war between Iran and the U.S. and Israel that started in late February. According to Oilprice.com, Iranian Parliament Speaker Mohammad Baqer Qalibaf said in June that management of the strait "will never return to the way it was before the war."
Bab el-Mandeb absorbs the rerouted barrels
Saudi Arabia shifted its export flow west to the Red Sea after Hormuz closed, and traffic through the Bab el-Mandeb strait nearly doubled to 8.1 million barrels a day in the second quarter, up from 4.2 million in the first half of 2025. The Houthis declared a maritime blockade of Saudi Arabia on July 20, and traceable transits dropped to 200 in the week of August 3, the lowest weekly count in a year. Rerouting around the Cape of Good Hope instead adds roughly 10 to 14 days and about $1.6 million in extra fuel plus canal fees on a single cargo, according to Reuters figures cited in the report.
Panama's canal is rationing water, not oil
Unlike the other chokepoints, Panama's constraint is weather rather than conflict. Gatun Lake sat just above 84 feet in early August, roughly a foot lower than in July, with the canal authority projecting around 83 feet by September. Maximum draft has been cut five times since July, and NOAA puts the odds of a very strong El Niño by late 2026 at 81%.
But daily transit slots remain unchanged at 36 — the figure the report says matters more than draft limits, since slot cuts reroute ships entirely while draft cuts only cost cargo.
Malacca's drop shows how far the shock travels
The Strait of Malacca, the largest oil chokepoint in the world, carried 23.2 million barrels a day in the first half of 2025 but only 16.6 million last quarter, even though nothing is physically blocking it. Much of that crude oil originated in the Gulf and had already passed through Hormuz once, so the closure throttled a strait 4,000 miles away. The pattern across all five alternate routes is the same: every workaround is either state-controlled, slow, or both.
Source: Oilprice.com
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