There is a recurring tendency in markets: to focus on what is immediately measurable, overlooking what is structurally significant.

That is precisely what is happening today.
Global attention — from media, political and financial quarters alike — is fixed on the Strait of Hormuz, long considered the barometer of worldwide energy tensions. And rightly so: Hormuz is the point at which the price of energy is determined almost in real time.

Yet even as all eyes are trained there, another chokepoint is quietly at work — in a more subdued but potentially more insidious manner — on the very foundations of the system: the Strait of Bab el-Mandeb.

An apparently peripheral passage

Geographically, Bab el-Mandeb is a strait of a few dozen kilometres connecting the Red Sea to the Gulf of Aden, forming the natural continuation of the Suez Canal towards the Indian Ocean.

A geography that might appear marginal, were it not for the fact that a significant share of commercial flows between Asia and Europe passes through it.

And here the first distinctive feature emerges: Bab el-Mandeb is not a sectoral node but a systemic piece of infrastructure.

Through this passage moves not only energy, but the entire architecture of global trade:

  • crude oil and refined products
  • liquefied natural gas
  • industrial components
  • consumer goods
  • technology and semiconductors
  • raw materials

It is not, therefore, a mere energy chokepoint. It is the point at which global logistics converge.

The risk that makes no noise

Markets are accustomed to reacting to binary events: open or closed, shock or normalcy.
But Bab el-Mandeb introduces a more sophisticated dynamic, and for that very reason a more difficult one to price: friction.

A complete blockage is not required to generate significant effects.
A sequence of intermittent tensions — isolated attacks, regional escalations, a rise in perceived risk — is sufficient to trigger a chain reaction:

  • higher insurance premiums on shipping routes
  • vessels diverted to alternative passages
  • congestion in ports and logistics chains
  • a progressive rise in freight rates

When routes are diverted and vessels circumnavigate Africa via the
Cape of Good Hope,
the system does not grind to a halt. But it becomes less efficient.

And in complex systems, it is precisely the loss of efficiency that represents the true cost.

From logistics to inflation: the transmission mechanism

Unlike the Strait of Hormuz, where the effect manifests directly in the price of oil, Bab el-Mandeb operates along a longer and more articulated transmission chain.

The impact is not immediate, but progressive.

It begins with transport, extends to production, and is ultimately reflected in consumer prices.

Businesses find themselves managing:

  • longer procurement lead times
  • higher logistics costs
  • greater uncertainty in planning

A portion of these costs is absorbed, compressing margins.
Another is passed downstream, feeding a form of inflation that is less conspicuous but more persistent.

It is an inflation that does not originate from demand or energy, but from systemic friction.

Why it is underestimated

The reason is, at its core, behavioural.

Hormuz offers markets a clear metric: the oil price.
Bab el-Mandeb does not.

There is no single synthetic indicator that immediately captures its state of stress.
Its impact is distributed, fragmented, diluted over time.

And what cannot be easily measured tends to be underweighted in valuation models.

Yet it is precisely in this asymmetry that risk is generated — and, for those who can read it, opportunity too.

A framework for reading the markets

Reducing the comparison between the two straits to a question of relative importance would be a mistake.

It is, rather, a matter of understanding their nature:

  • the Strait of Hormuz is a switch
  • the Strait of Bab el-Mandeb is a lever

The former generates immediate, visible shocks.
The latter alters, over time, the equilibrium of the system.

And it is often this second dynamic — slower, less conspicuous — that produces the most enduring effects on growth, inflation, and corporate margins.

Conclusion

Bab el-Mandeb is not at the centre of the narrative.
But it is one of the points at which the narrative can change.

Not through a dramatic event, but through a progressive deterioration of global operating conditions.

And in markets, as is so often the case, it is not what explodes that generates the deepest distortions, but what fractures slowly.

What to expect from the market?

Should tensions in the area persist:

  • pressure on transport costs could become structural
  • certain industrial sectors could experience a compression of margins
  • supply chains could remain unstable for longer than anticipated
  • indirect inflationary dynamics could emerge — less visible but more persistent

Not a rupture event, but a process.

And it is precisely in processes — not in shocks — that the most significant market trajectories are built.