Strategic trade routes become arenas for global state rivalry

A legal battle over control of two ports at the Panama Canal and the unchallenged passage of a US-sanctioned Chinese-linked tanker through the Strait of Hormuz have thrown shipping deeper into the centre of geopolitical confrontation, emphasising how strategic trade routes are increasingly becoming arenas of state rivalry rather than purely commercial activity.

In Panama, Panama Ports Company (PPC), a unit of Hong Kong-based CK Hutchison, has launched arbitration proceedings in London against Maersk over the takeover of port operations at Balboa and Cristobal, two terminals flanking one of the world’s most important maritime chokepoints.

PPC argues it was pushed out through state intervention and that control was handed to a Maersk-linked operator without a competitive process. Maersk has denied liability and said it will defend its position.

The dispute goes well beyond a standard concession clash. Panama’s Supreme Court annulled PPC’s long-standing contracts earlier this year, ruling that the agreements violated the constitution by granting exclusive privileges and tax exemptions.

The move came amid growing US pressure on Panama to curb Chinese influence over strategic infrastructure around the canal, through which around 5 per cent of world maritime trade passes.

Panama later granted temporary 18-month operating rights for the terminals to APM Terminals, part of Maersk, and Terminal Investment Ltd’s Panama unit, adding to tensions with CK Hutchison as it widened its arbitration claim against the Panamanian state to more than $2 billion.

The case has also complicated CK Hutchison’s wider ports business plans and drawn a sharp response from Beijing, which criticised Panama’s actions and, according to Reuters, has since stepped up scrutiny of Panama-flagged ships at Chinese ports.

At the same time, a separate flashpoint emerged in the Gulf. Rich Starry, a Chinese-linked tanker under US sanctions, passed through the Strait of Hormuz despite a new US naval blockade aimed at traffic to and from Iranian ports.

Reuters reported that the vessel, owned by Shanghai Xuanrun Shipping Co Ltd and previously sanctioned for Iran-related activity, became the first sanctioned tanker to exit the Gulf after the blockade took effect.

That transit was significant because it suggested the new US measures may still leave room for sanctioned or high-risk vessels to move, provided they are not sailing directly to or from Iranian ports.

According to Reuters, Rich Starry was carrying methanol from Hamriyah in the United Arab Emirates (UAE), not oil loaded in Iran, which appears to explain why it was able to pass unchallenged even as Washington tightened restrictions in and around Hormuz.

Taken together, the two cases show how shipping groups are being caught between commercial operations and strategic power politics.

In Panama, the fight is over who controls terminal infrastructure at one of the most sensitive gateways in global trade. In Hormuz, the issue is whether sanctions, military pressure and shifting enforcement lines can reshape tanker traffic through a route that carries about a fifth of the world’s oil and gas trade.

The stakes, therefore, are not only legal or financial. The Panama arbitration will be watched closely as a test of investment protection, concession stability and the limits of state intervention in port assets.

Meanwhile, the passage of Rich Starry points to the fragility of enforcement in wartime conditions, and to the continuing ability of sanctioned shipping networks to probe gaps in control over some of the world’s most important sea lanes.