Markets
Mapping the World’s Key Maritime Choke Points
Mapping the World’s Key Maritime Choke Points
Maritime transport is an essential part of international trade—approximately 80% of global merchandise is shipped via sea.
Because of its importance, commercial shipping relies on strategic trade routes to move goods efficiently. These waterways are used by thousands of vessels a year—but it’s not always smooth sailing. In fact, there are certain points along these routes that pose a risk to the whole system.
Here’s a look at the world’s most vulnerable maritime bottlenecks—also known as choke points—as identified by GIS.
What’s a Choke Point?
Choke points are strategic, narrow passages that connect two larger areas to one another. When it comes to maritime trade, these are typically straits or canals that see high volumes of traffic because of their optimal location.
Despite their convenience, these vital points pose several risks:
- Structural risks: As demonstrated in the recent Suez Canal blockage, ships can crash along the shore of a canal if the passage is too narrow, causing traffic jams that can last for days.
- Geopolitical risks: Because of their high traffic, choke points are particularly vulnerable to blockades or deliberate disruptions during times of political unrest.
The type and degree of risk varies, depending on location. Here’s a look at some of the biggest threats, at eight of the world’s major choke points.
Because of their high risk, alternatives for some of these key routes have been proposed in the past—for instance, in 2013 Nicaraguan Congress approved a $40 billion dollar project proposal to build a canal that was meant to rival the Panama Canal.
As of today, it has yet to materialize.
A Closer Look: Key Maritime Choke Points
Despite their vulnerabilities, these choke points remain critical waterways that facilitate international trade. Below, we dive into a few of the key areas to provide some context on just how important they are to global trade.
The Panama Canal
The Panama Canal is a lock-type canal that provides a shortcut for ships traveling between the Pacific and Atlantic oceans. Ships sailing between the east and west coasts of the U.S. save over 8,000 nautical miles by using the canal—which roughly shortens their trip by 21 days.
In 2019, 252 million long tons of goods were transported through the Panama Canal, which generated over $2.6 billion in tolls.
The Suez Canal
The Suez Canal is an Egyptian waterway that connects Europe to Asia. Without this route, ships would need to sail around Africa, which would add approximately seven days to their trips. In 2019, nearly 19,000 vessels, and 1 billion tons of cargo, traveled through the Suez Canal.
In an effort to mitigate risk, the Egyptian government embarked on a major expansion project for the canal back in 2015. But, given the recent blockage caused by a Taiwanese container ship, it’s clear that the waterway is still vulnerable to obstruction.
The Strait of Malacca
At its smallest point, the Strait of Malacca is approximately 1.5 nautical miles, making it one of the world’s narrowest choke points. Despite its size, it’s one of Asia’s most critical waterways, since it provides a critical connection between China, India, and Southeast Asia. This choke point creates a risky situation for the 130,000 or so ships that visit the Port of Singapore each year.
The area is also known to have problems with piracy—in 2019, there were 30 piracy incidents, according to private information group ReCAAP ISC.
The Strait of Hormuz
Controlled by Iran, the Strait of Hormuz links the Persian Gulf to the Gulf of Oman, ultimately draining into the Arabian Sea. It’s a primary vein for the world’s oil supply, transporting approximately 21 million barrels per day.
Historically, it’s also been a site of regional conflict. For instance, tankers and commercial ships were attacked in that area during the Iran-Iraq war in the 1980s.
The Bab el-Mandeb Strait
The Bab el-Mandeb Strait is another primary waterway for the world’s oil and natural gas. Nestled between Africa and the Middle East, the critical route connects the Mediterranean Sea (via the Suez Canal) to the Indian Ocean.
Like the Strait of Malacca, it’s well known as a high-risk area for pirate attacks. In May 2020, a UK chemical tanker was attacked off the coast of Yemen–the ninth pirate attack in the area that year.
Due to the strategic nature of the region, there is a strong military presence in nearby Djibouti, including China’s first ever foreign military base.
Markets
Visualizing Portfolio Return Expectations, by Country
This graphic shows the gap in portfolio return expectations between investors and advisors around the world, revealing a range of market outlooks.

Visualizing Portfolio Return Expectations, by Country
This was originally posted on Advisor Channel. Sign up to the free mailing list to get beautiful visualizations on financial markets that help advisors and their clients.
How do investors’ return expectations differ from those of advisors? How does this expectation gap shift across countries?
Despite 2022 being the worst year for stock markets in over a decade, investors around the world appear confident about the long-term performance of their portfolios. These convictions point towards resilience across global economies, driven by strong labor markets and moderating inflation.
While advisors are optimistic, their expectations are more conservative overall.
This graphic shows the return expectation gap by country between investors and financial professionals in 2023, based on data from Natixis.
Expectation Gap by Country
Below, we show the return expectation gap by country, based on a survey of 8,550 investors and 2,700 financial professionals:
Long-Term Annual Return Expectations | Investors | Financial Professionals | Expectations Gap |
---|---|---|---|
🇺🇸 U.S. | 15.6% | 7.0% | 2.2X |
🇨🇱 Chile | 15.1% | 14.5% | 1.0X |
🇲🇽 Mexico | 14.7% | 14.0% | 1.1X |
🇸🇬 Singapore | 14.5% | 14.2% | 1.0X |
🇯🇵 Japan | 13.6% | 8.7% | 1.6X |
🇦🇺 Australia | 12.5% | 6.9% | 1.8X |
🇭🇰 Hong Kong SAR | 12.4% | 7.6% | 1.6X |
🇨🇦 Canada | 10.6% | 6.5% | 1.6X |
🇪🇸 Spain | 10.6% | 7.6% | 1.4X |
🇩🇪 Germany | 10.1% | 7.0% | 1.4X |
🇮🇹 Italy | 9.6% | 6.3% | 1.5X |
🇨🇭 Switzerland | 9.6% | 6.9% | 1.4X |
🇫🇷 France | 8.9% | 6.6% | 1.3X |
🇬🇧 UK | 8.1% | 6.2% | 1.3X |
🌐 Global | 12.8% | 9.0% | 1.4X |
Investors in the U.S. have the highest long-term annual return expectations, at 15.6%. The U.S. also has the highest expectations gap across countries, with investors’ expectations more than double that of advisors.
Likely influencing investor convictions are the outsized returns seen in the last decade, led by big tech. This year is no exception, as a handful of tech giants are seeing soaring returns, lifting the overall market.
From a broader perspective, the S&P 500 has returned 11.5% on average annually since 1928.
Following next in line were investors in Chile and Mexico with return expectations of 15.1% and 14.7%, respectively. Unlike many global markets, the MSCI Chile Index posted double-digit returns in 2022.
Global financial hub, Singapore, has the lowest expectations gap across countries.
Investors in the UK and Europe, have the most moderate return expectations overall. Confidence has been weighed down by geopolitical tensions, high interest rates, and dismal economic data.
Return Expectations Across Asset Classes
What are the expected returns for different asset classes over the next decade?
A separate report by Vanguard used a quantitative model to forecast returns through to 2033. For U.S. equities, it projects 4.1-6.1% in annualized returns. Global equities are forecast to have 6.4-8.4% returns, outperforming U.S. stocks over the next decade.
Bonds, meanwhile, are forecast to see 3.6-4.6% annualized returns for the U.S. aggregate market, while U.S. Treasuries are projected to average 3.3-4.3% annually.
While it’s impossible to predict the future, we can see a clear expectation gap not only between countries, but between advisors, clients, and other models. Factors such as inflation, interest rates, and the ability for countries to weather economic headwinds will likely have a significant influence on future portfolio returns.
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