The Banking Executive Magazine - May 2026 Issue - New

Impact of US-Iran War INTRODUCTION World trade routes are the arteries of international commerce, connecting continents through sea, land, and air. The most dominant are maritime shipping lanes, which carry nearly 90% of global trade volume. This ar- ticle overviews world trade routes and their strategic importance to the global supply chain. The article high- lights the impact of US-Iran war in 2026 on world trade routes and on goods and services shipped along these trade routes and the disruption to global supply chain. The article concludes with strategies for Arab banks to build more resilient global supply chain and sustainable world trade routes along the supply chain. OVERVIEW OF WORLD TRADE ROUTES World trade routes are structured around critical chokepoints. Each of these narrow passages handles enor- mous volumes of goods, from oil and gas to manufactured products, mak- ing them indispensable yet vulnera- ble points in the global economy. Major ports like Rotterdam, Singa- pore, Shanghai, Los Angeles, and Dubai serve as hubs where these flows converge and redistribute. Beyond the seas, continental trade corridors also play a vital role. The modern revival of the Silk Road through China’s Belt and Road Initia- tive has expanded rail and road net- works across Central Asia and into Europe. Africa’s trade with Europe is largely mediated through Mediter- ranean shipping and North African ports, while North America’s ex- changes with Asia depend heavily on Pacific shipping lanes linking United States (US) West Coast ports to East Asia. Air cargo routes, though smaller in volume, are essential for high-value and time-sensitive goods such as electronics and pharmaceu- ticals. Hubs like Hong Kong, Dubai, Frankfurt, and Memphis dominate this sector. The Suez Canal carries about 12% of global trade, while the Strait of Malacca handles nearly a quarter of maritime traffic. The Strait of Hormuz is critical for oil shipments, with around 20% of global petroleum passing through. Other strategic pas- sages include the Bosporus Strait in Turkey and the Bab el-Mandeb near the Horn of Africa. Any disruption in these areas, whether from geopoliti- cal conflict, piracy, or accidents, can ripple across global supply chains. Looking ahead, climate change is re- shaping trade geography. Melting Arctic ice is opening the Northern Sea Route, which could shorten ship- ping times between Europe and Asia. At the same time, congestion, envi- ronmental risks, and regional insta- bility continue to challenge existing routes. Maritime shipping remains the backbone, air cargo is expand- ing, and new land corridors are ISSUE 209 MAY 2026 the BANKING EXECUTIVE 9