the start of the Iran war<\/span><\/a>, lies at the entrance to the Persian Gulf, while the Red Sea \u2013 linked to the Indian Ocean via the Bab el-Mandeb Strait and to the Mediterranean via the Suez Canal \u2013 forms a second critical corridor for global energy and shipping.<\/p>\nShould the situation in the Red Sea escalate, it could raise the risk of a double chokehold on global trade and energy supply, said Nomura. \u201cAny attacks in the Red Sea would result in the closure of the Bab el-Mandeb Strait,\u201d it said.<\/p>\n
The Japan-headquartered investment bank noted that although traffic through the Red Sea had declined since 2023, it remains a key route linking Europe and Asia. <\/p>\n
In 2025, flows through the Bab el-Mandeb Strait and Suez Canal were split roughly evenly between tankers, which carry oil, and other cargo ships, with volumes similar to those passing through the Strait of Hormuz, Nomura said. <\/p>\n
In a March 29 report, JPMorgan analysts warned that a closure of the Bab el-Mandeb Strait could push oil prices up by as much as US$20 per barrel. Brent crude, a popular oil benchmark, was trading at US$109 per barrel on April 3, which is more than double the price at the start of 2026.<\/p>\n
A double chokehold on these key routes would thus feed quickly into higher fuel, electricity and transport costs in countries like Singapore that import their energy needs, with knock-on effects on the prices of food and other goods as the higher costs are gradually passed on by businesses to their customers.<\/p>\n
Disruptions to oil supply from the closure of the Strait of Hormuz have already had an impact here, with a rise in petrol, cooking gas and electricity prices, as well as air fares and taxi fares. <\/p>\n
Analysts said higher prices are now feeding into the Republic\u2019s bunkering market, which is a global hub for marine fuel supply. <\/p>\n