Moving the Molecules: Securing Energy Trade Through Contested Routes

A large share of global oil, gas and LNG trade passes through a small number of maritime chokepoints. Disruption around routes such as Hormuz and the Red Sea has rerouted cargoes and lengthened voyages. Longer delivery times raise freight costs, and the delivered price of every cargo moves with them. Insurers have raised war-risk premiums on affected routes, adding further cost to each delivery.

In the midst of this, buyers and sellers have to keep cargoes moving. Supply has diversified, and contracts increasingly allow a cargo to be redirected mid-voyage. Hedging mitigates the price exposure that creates. Flexible routing and coordination between producers, traders and consumers form the contingency plan behind all of it.

The discussion will focus on how buyers and sellers keep cargoes moving when routes shift, what redirection and insurance actually cost, and who ends up carrying that cost.