Disruption of maritime trade chokepoints and the global LNG trade: An agent-based modeling approach

Abstract

Maritime chokepoints are key corridors in the global supply chain because they connect waterbodies, countries, and regions worldwide with few alternative routes. In case of closure (as the blockade of the Suez Canal in March 2021), the energy supply is substantially affected. Therefore, clear and safe passage through these chokepoints plays a critical role in energy transportation, global economy, and sustainable development. This study uses Agent-Based Modeling to develop an LNG market model and simulate the disruption of three main chokepoints: Panama Canal, Suez Canal / Bab el-Mandeb Strait, and Malacca Strait. After validating the computational model with the actual historical data, the model shows the chokepoints blockade effects on changing the LNG trade and exports from suppliers. The implications are immediate. In general, countries should work together to secure maritime trade routes, retain clear and safe maritime corridors, establish potential passages as alternatives to these chokepoints where possible, and decentralize LNG plants to have access from or to different maritime routes. Each importer should integrate their gas markets with pipelines networks, search for domestic gas resources, and diversify energy sources to decline energy dependency and gas imports from remote producing areas.