Global Shipping Faces A Perfect Storm

Conflict in the Red Sea, the closure of the Strait of Hormuz, and climate-driven draft limits at the Panama Canal are squeezing global shipping at once, leaving operators with few options for rerouting.

Before the US-Israeli war on Iran began on February 28, the Strait of Hormuz typically handled about 125 large commercial vessels a day, including tankers, gas carriers, bulk carriers and container ships. In 2025, the strait carried around 20 million barrels of oil a day, roughly 25% of the world's seaborne oil trade.

With the waterway now closed, that flow has been cut off. Iran and the U.S. remain far apart on how to end the war, and there is no clear sign of when shipping might resume.

Further west, the Bab al-Mandeb strait, gateway to the Red Sea and the Suez Canal, remains unsafe. Shipping there has been disrupted by Houthi attacks, forcing many carriers to avoid the route. In 2023, about 12% of global trade passed through the strait, including 11% of maritime oil and 8% of liquefied natural gas.

Meanwhile, the Panama Canal, which handles around 5% of maritime trade, is struggling with El Niño-related water shortages. Limits on vessel transits and draft (how deep a ship can sit in the water) are causing delays and pushing up shipping costs.

With three major routes under pressure simultaneously, shippers have few viable alternatives. Diverting around Africa or taking longer routes adds time and expense, and there is little spare capacity elsewhere to absorb the disruption.

Russia’s Jet Drones Outpacing Ukraine’s Interceptors

In recent weeks, Russia has begun hitting Kyiv and other Ukrainian cities with faster, high-flying jet drones, outpacing Ukraine’s air defense interceptors.

The upgraded Geran munitions can cruise at more than 480km/h, significantly faster than older models and well beyond the top speed of Kyiv’s interceptors. The drones are powered by turbojet engines, some of which, according to Ukrainian military intelligence, are sourced from China.

Earlier this year Ukraine showed relative success in countering Russian drones and was intercepting 94% of long-range drones, according to President Volodymyr Zelensky. But the speed of the newer drones has prompted the latest round in Kyiv and Moscow’s arms race. On August 10, Ukraine's deputy head of military intelligence, Maj Gen Vadym Skibitskyi, said his forces needed new interceptor missiles “capable of matching [jet-drones'] speed”.

Four Ukrainian companies have reportedly begun testing missiles capable of shooting down the new Geran models, officials in Kyiv recently told reporters. The country’s new defense minister, Yevhenii Khmara, has tasked them with producing “thousands of units” as quickly as possible, the BBC said.

Israel Flight Incident Could Be “Terror Attack”

Israel’s government believes an incident on a Flydubai flight from the UAE to Israel, which diverted to Saudi Arabia after a reported cockpit stabbing, may have been an attempted “terror attack”.

The co-pilot of the flight from Dubai to Tel Aviv is believed to have stabbed the captain, Reuters reports, citing three Israeli officials. The stabbing forced the plane to divert to Saudi Arabia, where it landed safely.

The Flydubai aircraft left Dubai International Airport early on Wednesday morning. About two hours into the flight, it sent out an emergency signal.

Flight-tracking data also showed the plane suddenly losing altitude.

Flight FZ1073 was carrying roughly 150 people, most of them Israelis. It abandoned its route to Ben-Gurion Airport and landed at Tabuk Airport in north-western Saudi Arabia.

After landing, passengers told local media that a stabbing had taken place in the cockpit.