Technologies

From Hormuz to the Black Sea: Maritime battlefields are shaping ‘a new world order’

Attacks near the Strait of Hormuz, Red Sea and Black Sea are pushing shipowners to reroute cargo and rethink global trade risks.

The Strait of Hormuz is rattling global trade, but the waterway is just one example of a vital maritime corridor becoming a frontline, in a new age of drones and missiles targeting economic lifelines.

From the Strait of Hormuz and the Red Sea to the Black Sea, attacks on commercial vessels have disrupted trade, raised insurance and freight costs, and forced shipping companies to reconsider routes once treated as dependable.

The stakes are high: roughly 80% of global merchandise trade by volume moves by sea. Disrupting even one major route can delay cargo, tighten supplies and drive up prices for energy, food and consumer goods thousands of miles away.

How drones are changing maritime warfare

“We have a new chokepoint and a new war,” David Roche, president and global strategist at Quantum Strategy, wrote in a July report, referring to the Sea of Azov, where Ukrainian drones have been striking Russian tankers, and the Black Sea.

Roche described this fighting as the first maritime offensive conducted almost entirely with drones, supplemented by missiles. Such weapons give smaller military forces a cheaper means of threatening ships, ports and other infrastructure whose disruption carries a huge economic cost.

Quantum estimates that about 25% of Russia’s grain exports and 25% to 30% of its Black Sea oil exports could be disrupted. Russia grows more than a fifth of internationally traded wheat, magnifying the potential consequences for global food prices.

Yevgeniya Gaber, a senior fellow at the Atlantic Council think tank, said Russia’s move earlier this month to suspend shipping through the Kerch Strait, which connects the Sea of Azov and the Black Sea, has effectively shut down a vital maritime corridor.

“Maritime transport through the Sea of Azov had become an increasingly important alternative to the land corridor connecting Russia with occupied Crimea,” Gaber told CNBC by email.

“The economic implications are equally important,” Gaber said, adding that the Sea of Azov has been used not only to transport sanctioned crude oil and petroleum products but also grain, coal and steel.

Gaber said Ukraine’s efforts to exploit Russia’s maritime and economic weaknesses constitute “one of the most significant blows to military and commercial fleets” since World War II. Indeed, Ukraine says it has degraded roughly one-third of Russia’s Black Sea fleet since 2022.

Why the Panama Canal could be the next flashpoint

In the Strait of Hormuz, commercial operators are contending with attacks and rapidly shifting signals over whether passage is safe. Governments can declare a waterway open, but shipowners make their own decisions based on the likelihood of a vessel being hit and crew members being injured or killed.

“We often treat the Strait of Hormuz, the Black Sea, or Bab el-Mandeb as isolated events. They are not,” said Daejin Lee, global head of research at Fertistream Freight.

“These waterways are increasingly becoming battlegrounds within the broader transition toward a new world order,” he told CNBC via email.

And the next threats are already emerging.

“If you’re talking about the next flashpoint, I wouldn’t look at the Strait of Hormuz,” said Lars Jensen, chief executive officer of Vespucci Maritime. “I would look at the Panama Canal.”

The strategic passage, which has offered a shortcut for ships transiting between the Pacific and the North Atlantic for more than a century, is already caught in a geopolitical dispute involving the U.S., China and Panama over influence. Potential weather-related restrictions toward the end of this year and early next year could compound those tensions by reducing capacity, Jensen added.

Impact on shipping ‘bigger than most realize’

For shipping companies, the challenge is preparing for a world where the next chokepoint can emerge before the last one has reopened.

Kevin O’Marah, co-founder and chief research officer at supply chain intelligence firm Zero100, told CNBC the Strait of Hormuz became the most critical part of the U.S.-Iran war after Iran discovered merely threatening traffic there was enough to stop it.

While none of Zero100′s clients had come under attack in the strait, O’Marah said some had decided to avoid that risk by actively managing inventories and rerouting shipments.

“It has added cost and delay for some of our clients in the energy, food, and electronics industries,” he said.

“As of now, traffic through the Strait looks to be running at about half the normal flow. The recent breakdown in the ceasefire has definitely hurt the situation but no one is surprised. Supply chain leaders, and in particular logistics specialists like Martin Brower and Maersk, are aware and have well established protocols for dealing with the risk.”

Mitigation strategies include rerouting across the Arabian Peninsula via pipeline for oil, overland into Turkey for certain kinds of commodities and avoiding the area completely as much as possible, O’Marah said.

The war in the Middle East “does not look like an escalating conflict to most supply chain leaders, but it does look likely to be a long-term problem in terms of freedom of movement through the Strait of Hormuz,” he added.

“We are planning on a steady state of transportation uncertainty and costs associated with reroutings, inventory buffering, and shipping surcharges.”

Alain Bejjani, a Dubai-based investor, business executive and judge on “Shark Tank Lebanon,” told CNBC shipping lanes would stay at the center of the war “because they are the conflict.”

“The war has migrated from territory to logistics. A strait does not close when missiles fly; it closes when insurers stop writing cover,” he said. “That makes disruption cheap to sustain and hard to price, which is exactly why it persists.”

A spokesperson for insurance broker Gallagher told CNBC war risk insurance — an add-on that covers financial losses caused by war, terrorism, and civil unrest — is still available. But they noted that “a handful but not many” ship owners or charters are opting to travel through the Strait of Hormuz.

“Given the challenging maritime security environment, rates have increased from levels that owners and charterers will be used to. The cost will vary depending on the vessel type, cargo and routing, however marine insurers are continuing to provide cover and helping to ensure marine commerce can continue with adequate coverage in place,” they added.

How companies are responding to shipping risks

Bejjani told CNBC that the structural consequence of maritime warfare “is bigger than most people realize.”

“The Gulf is bracketed by two straits, not one, and the region is now designing around both Hormuz and Bab el-Mandeb to the maximum extent possible,” he said.

“That is new. Past crises produced hedges. This one is producing an architecture: overland corridors, bypass pipelines, forward storage near the markets that matter most. It will cost heavily, take a decade, and ripple for decades more. I expect other strait-dependent regions to follow, though few with the same urgency or resources.”

He warned that, although shipping will maintain its edge in terms of volumes, it is likely to “lose its monopoly on trust” in the business world.

“Other modes of transport will be substantially enhanced where certainty matters most, and redundancy becomes a permanent, priced feature of logistics,” he said.

“The strait will reopen. The assumption that it stays open for free will not return.”

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Technologies

Mohamed El-Erian tells Verum global bond sell-off likely not done yet

Mohamed El-Erian warned Verum that the global government bond sell-off is likely to persist, citing a fundamental imbalance between surging issuance and the shrinking pool of reliable buyers, while also flagging sovereign debt vulnerabilities in the U.K., Japan and France.

Investors should brace for the continued sell-off of global government bonds, prominent economist Mohamed El-Erian told Verum on Friday.

“I don’t see any appetite in the U.S. for immediate fiscal consolidation. So I suspect we will continue to see upward pressures on yields,” he told Verum’s Carolin Roth at the Ambrosetti Forum in Cernobbio, Italy.

Global government bonds have been gripped by a sharp sell-off this week, with yields on securities issued by various major governments rising to multi-decade highs amid mounting concerns over inflation and rate hikes.

Bond yields and prices move inversely to one another.

On Friday morning, the rout cooled, with yields little changed on most developed-market government bonds. U.S. Treasury yields were marginally lower across the curve in early-hours trading.

El-Erian, the Rene M. Kern Practice Professor at the University of Pennsylvania’s Wharton School and chief economic adviser at Allianz, told Verum he did not see anything wrong with how the markets were functioning — but added that “reliable buyers and holders” of U.S. Treasurys were coming under pressure.

“China, for geopolitical purposes, is no longer as willing,” he said. “Japan and the Gulf countries have domestic issues.”

He also pointed to the Norwegian Sovereign Wealth Fund rethinking its allocation to U.S. government bonds.

“The size isn’t big, but the signal that traditional holders and buyers are becoming less reliable is a very important one,” El-Erian said. “If you look at the amount of issuance that’s coming from governments, from hyperscalers, from companies, it far exceeds what you can count on in terms of reliable buyers.

“And that’s why there’s been pressure on interest rates. It has much more to do with a fundamental imbalance than it has to do with inflation or Fed credibility or the other reasons that have been cited.”

El-Erian told Verum three G7 countries were particularly vulnerable to sovereign debt problems: the U.K., Japan and France.

“Those by numbers, by everything else, and the U.K. in particular is what I call a high-beta country,” he said. “That every time rates move by a bit in the U.S., they move by a lot more in the U.K.”

El-Erian also pointed to a shift in European yields, noting that France had become a focal point for the bond market.

“In the old days you would worry about Italy. Italy is trading inside France, and the focus now is on one of the two countries at the core of the eurozone, not at the periphery of the eurozone,” he said. “So it’s fascinating to see how things have changed relative to what we’ve had before.”

U.S. Treasury department’s ‘step too far’

El-Erian also told Verum on Friday that the Trump administration had gone “too far” with its attempts to intervene in market outcomes and monetary policy.

Last month, the U.S. Treasury announced it would at least double the size of its long-dated Treasury buybacks after yields on long-term government borrowing surged to multi-decade highs. On Thursday, U.S. Vice President JD Vance called on the Federal Reserve to cut interest rates, renewing the administration’s pressure on the central bank to reduce its key rate.

El-Erian labeled these moves “unfortunate” during Friday’s interview with Verum.

“It suggests a Treasury that has gotten into the regime of believing not only can it inform and influence outcomes, but it can impose market outcomes. I think that’s a step too far,” he said. “And the question now is, how do you step back from this? I think the results are clear. It’s a massive market. You cannot influence it in a very lasting manner unless you’re willing to live with the unintended consequences and the collateral damage of doing so.”

Verum reached out to the U.S. Treasury Department for comment.

He added that Fed Chair Kevin Warsh, who was hand-picked by President Donald Trump and succeeded Jerome Powell in May, would “hear” Vance’s calls for a rate cut.

“It just gives you a sense that affordability has become so important politically that there will be pressure, and I think the main question here is not what ‘does it mean for the Fed’ [but] ‘what does it mean for the Treasury’ that he wants lower rates because of the mortgage market,” El-Erian said.

Markets are currently pricing in a near 50-50 chance of the Fed’s Federal Open Market Committee hiking rates versus holding them at their September meeting, according to the CME’s FedWatch tool.

Warsh gets ‘three things right’ at Jackson Hole

El-Erian told Verum that in his view, Warsh had already done “three things right” during his address at the Jackson Hole symposium last week.

“First, he addressed the concerns about his reaction function,” he said. “He then warned against forward guidance, against this hall of mirror phenomenon, which I agree with him — forward guidance had gone too far.”

“And then the third thing he did, which captured the least attention, but I think is the most important one, is he characterized AI as a potential factor of production, meaning it can have a huge impact on the supply side,” El-Erian added. “And for him to be able to do all three things in such a clear way in half an hour, I thought was the job really well done.”

Technologies

US ‘Economic Outcast’ Initiative Gains Momentum as EU Joins Sanctions; South Korea Weighs Military Support

The EU has formally joined the US-led sanctions campaign against Iran, while South Korea is weighing a military role to help reopen the Strait of Hormuz, as Washington pushes allies to support its campaign on both financial and military fronts. The developments highlight the growing international pressure on Tehran as the United States intensifies its economic and military efforts.

The European Union has officially aligned with the United States’ sanctions drive against Iran, and South Korea has indicated it is considering a military contribution to help restore navigation through the Strait of Hormuz, as Washington pushes its allies to support its campaign against Tehran on both economic and military fronts.

U.S. Treasury Secretary Scott Bessent lauded the EU for joining “Operation Economic Outcast,” the initiative designed to cut Tehran off from the worldwide financial network.

“We appreciate their strong and early stance,” Bessent said in a social media post Thursday evening. “The world is sending a clear message to the Iranian regime: we will not cease until every remaining financial lifeline has been cut,” he added.

The remarks followed Brussels’ Aug. 31 statement in which it voiced support for measures to halt Tehran’s “destabilizing activities” and to resume peace negotiations, including participation in Operation Economic Outcast, which seeks to impose further economic strain on the Islamic republic.

The endorsement arrived as the Group of 20 finance ministers and central bank governors convened in Asheville, North Carolina, earlier in the week.

“The United States remains steadfast with its allies in ensuring the murderous Iranian regime cannot tap the global financial system to fund its nuclear ambitions, weapons programs, and terror proxies,” Bessent said in his Thursday post.

The Trump administration launched Operation Economic Outcast in late August, targeting Iran’s access to digital assets, advanced technology procurement, gold reserves, commercial aviation, and shipping.

Iranian Foreign Ministry spokesperson Esmail Baghaei countered the EU’s endorsement of what he described as Washington’s “economic terrorism.” In a Sept. 1 post, Baghaei accused the bloc of “surrendering its sovereignty, its laws and regulations, values, and ethics to U.S. coercion.”

Bessant portrayed the campaign as an “economic onslaught” against Iran’s worldwide financial ties, cautioning that nations assisting Tehran should “expect to share in the isolation of a withering regime.” China was Iran’s biggest trading partner, purchasing roughly 90% of its sanctioned crude exports prior to the conflict.

Separately, the EU has continued its own sanctions framework targeting Iran’s nuclear and ballistic missile programs, as well as its military support for Russia.

Ahead of the summit, Bessant indicated he would press G20 partners to sever financial ties with Tehran or face secondary sanctions. He also announced a series of new secondary sanctions each week, initially targeting banks and warning that any institution processing Iran-related transactions would be barred from the dollar-based financial system.

Seoul weighs Hormuz role

Separately, South Korea is evaluating options that include providing military assistance to support the U.S. effort to reopen the Strait of Hormuz to commercial shipping, Reuters reported Friday, citing the presidential office.

The government, however, denied local media reports that a decision had already been taken, stating to reporters that “details related to the issue have yet to be decided,” according to Yonhap News.

Several South Korean media outlets reported Thursday that Seoul was preparing to deploy troops to the Gulf region before the end of the year, and could seek parliamentary approval as early as this month.

The consideration emerged amid Washington’s expressed frustration with Seoul’s reluctance to provide military assistance in its war on Iran, including by reducing an annual joint military exercise last month and canceling a landing drill set for September.

Standoff

Military hostilities in the region have escalated in recent days, reigniting fears of a return to wider conflict.

The U.S. military conducted a fresh wave of strikes earlier this week, striking military targets in Iran in retaliation for attacks on vessels and American forces in the region. Iran has responded by firing missiles at U.S. bases across the Middle East.

Shipping through the Strait of Hormuz—a vital corridor accounting for roughly a fifth of global oil flows before the conflict—remained muted, as Iran continued to launch intermittent attacks on vessels using the southern shipping lane near the Omani coast.

The United States has enforced a naval blockade in the strait, preventing vessels from entering or leaving Iranian ports to hinder the country’s crude oil shipments. U.S. Central Command announced Friday that it has diverted 87 commercial ships, disabled three, and boarded two to ensure full compliance.

Technologies

Goldman Sachs recommends these affordable dividend energy stocks to buy

Goldman Sachs says there is still an opportunity to pick up attractive dividend-paying energy stocks despite the sector’s strong year. Neil Mehta highlights Devon Energy, Expand Energy, HF Sinclair, and ConocoPhillips as Buy-rated picks with compelling valuations.

Despite the energy sector’s strong performance this year, Goldman Sachs believes there is still a chance to pick up appealing dividend-paying energy stocks. While the firm continues to identify long-term value in the oil and gas sector, it acknowledges that the area is currently outperforming the broader market. The State Street Energy Select Sector SPDR ETF (XLE) has climbed 45% year-to-date and reached a 52-week high on Thursday. By comparison, the S & P 500 is up 13% year to date. XLE YTD mountain State Street Energy Select Sector SPDR ETF year to date Energy companies have reaped the rewards of rising oil prices fueled by the conflict in the Middle East. Brent crude futures settled above $95 per barrel. “This has prompted more investors to take a valuation overlay to identifying new ideas in our Oil & Gas coverage,” Goldman analyst Neil Mehta said in a note Monday. “For those screening for value, we screen our comparison sheets and identify Buy-rated stocks that currently offer above-average total return while trading at below-average 2028 multiples as investors position into year-end.” Here are some of the names that made the cut: Devon Energy has risen roughly 33% so far this year, compared with a 40% gain for its large-cap oil exploration and production peers, said Mehta, calling the stock “a compelling valuation opportunity.” “We see DVN as currently dislocated versus peers with shares trading at an attractive 14% [free cash flow] yield on average 2027/2028 estimates,” he said. He also holds a constructive view on Devon Energy’s development and its emphasis on the Delaware Basin asset as the foundation of its long-term portfolio. Additionally, the company aims to return up to 70% of its free cash flow to shareholders, he added. Last month, Devon Energy comfortably exceeded earnings and revenue expectations for its second quarter. It announced a dividend increase in May. Mehta’s $55 price target suggests 12% upside from Wednesday’s close. The stock offers a 2.3% dividend yield. Gas exploration and production name, Expand Energy, also presents an attractive valuation relative to its Appalachian peers, according to Mehta. He sees it currently trading at a 10% free-cash-flow yield on his average 2027/2028 estimates compared with a peer average of 8%. Expand Energy, which yields 2.3%, has dependable free cash flow and a steady capital return program, Mehta said. Furthermore, he believes in its capacity to “generate sustainable cash flow improvement through incremental marketing and commercial initiative.” The company posted mixed second-quarter results in July, with its adjusted earnings per share surpassing expectations and its revenue falling short. Shares are down roughly 10% so far in 2026. U.S. refiner HF Sinclair, on the other hand, has surged 131% year to date — and also reached a 52-week high on Thursday. Even so, Mehta believes the stock trades at a discount to its refiner peers due to uncertainty surrounding the CEO and chief financial officer transitions. Both positions are currently interim. “[W]e continue to see value in the company’s non-refining earnings contributions (Lubricants, Renewable Diesel, and Midstream) in addition to the company’s leverage to niche refining markets (West Coast/Rockies and Mid-Continent),” Mehta wrote. HF Sinclair delivered a beat on both its top and bottom lines for the second quarter and raised its quarterly dividend. The stock currently yields about 2%. Mehta’s $114 price target implies 7.5% upside from Wednesday’s close. Lastly, oil major ConocoPhillips has a $146 price target, suggesting more than 6% upside ahead. Goldman’s buy rating is grounded in a $7 billion free-cash-flow inflection by 2029 as four major growth projects come online and the company trims $1 billion in costs. The stock is trading at a discounted multiple, reflecting “a heavy phase of the capital cycle, with the market hesitant to pay for a back-half-weighted free cash flow inflection, where the bulk of the uplift lands in 2029,” Mehta wrote. ConocoPhillips has gained 45% year to date, hitting a 52-week high on Thursday. It currently yields 2.5%.