'Choke Point' Becomes Global Economy Shorthand
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Iranian-backed Houthis are targeting Saudi ships in the Red Sea, threatening traffic through the Bab el-Mandeb Strait, which carried about 5.7% of the world's oil in Q1 2026, up from roughly 3.5% in the same period a year earlier, per EIA data analyzed by Axios.
- Saudi Arabia has been routing more oil through Red Sea pipelines to bypass the Strait of Hormuz, but that rerouting is now itself under threat from Houthi attacks.
- Brent crude is trading above $100 a barrel, with Standard Chartered Bank commodities researchers calling the Middle East situation a "two-choke-point problem."
- Goldman Sachs analysts wrote in May that AI expansion is "currently limited by severe 'chokepoints' in the broader ecosystem," citing strained data center capacity and U.S. power shortfalls, alongside broader geographic and economic dependencies like rare earths (China), advanced AI chips, and the U.S. dollar.
- McKinsey released a guide for businesses this week defining choke points as "economic dependencies with limited short-term substitutes" that could restrict trade flow.
- Apollo chief economist Torsten Slok published "The Chokepoint Risk" this week, arguing geopolitical leverage lies in "the narrow passages through which the world's oil actually flows" rather than in oil reserves.
- Eddie Fishman, a former Obama sanctions policy official and Council on Foreign Relations senior fellow, published the book "Chokepoints" last year and says the term has since "transcended the book."
Why it matters: The term's migration from Fishman's book to a McKinsey corporate playbook, a Goldman Sachs AI report, and Apollo's investor note shows the post-free-trade assumption of frictionless specialization is being replaced by active contingency planning — businesses are now pricing in disruption from oil routes ($100+ Brent) to data center power shortfalls, with the term's 9 mentions on last quarter's earnings calls likely to climb sharply.
