Macroeconomic Risks from Maritime Trade Disruptions

Abstract

This paper develops a model of maritime chokepoint closures in which interrupting a shipping passage produces losses that are not measured, or even bounded, by the value of the trade that transits it. The losses stem from disruptions to the flow of intermediate inputs that are complementary in downstream production. Re-matching displaced trade on the buyer and seller sides of the market limits the damage but, at the calibrated recovery friction, does not eliminate it. Across countries, the incidence of these losses is heavy-tailed, and it reaches economies whose cargo never crosses the passage. The two ends of a severed corridor lose unequally, the exporting side by several times at the typical corridor and by a factor of twelve at the largest energy gate, as economic geography funnels commodity-concentrated sellers through a single passage while their buyers re-source. Joint maritime chokepoint closures depart from the sum of their parts: the Middle East scenario is sub-additive, while the East Asia and Russia--Europe scenarios are super additive. The Strait of Hormuz, the largest of the energy gates and the sole sea exit of the Persian Gulf, closed at the end of February 2026. The model prices a sustained closure of it at 1.6% of world GDP, and at roughly half that once the overland crude pipelines the episode mobilized are credited.