US-Iran: Global Trade Looks To Cape Route 

GEOPOLITICAL: Rising conflict in the Middle East is pushing global shipping away from the Suez Canal and back around Africa’s southern tip…

By Francois Vrey

Events in the Middle East during February and March 2026 once again disrupted the flow of global shipping between the eastern and western spheres of the international economy.

Because the global economy depends heavily on maritime transport, safe and predictable sea routes are critical. The armed attacks on Iran and the resulting maritime tensions sharply highlighted how vulnerable global trade remains to geopolitical conflict.

While the military strikes themselves drew much of the attention, a quieter but significant development was unfolding in the shipping industry. Shipping companies and insurers began reconsidering the strategic value of the Cape sea route around the southern tip of Africa as an alternative to the increasingly unstable northern passages.

Following Israeli and US attacks on Iran, Tehran retaliated by closing the Strait of Hormuz, one of the most critical oil and shipping chokepoints in the world. The closure disrupted maritime traffic and added pressure to already strained global trade routes.

Military hostilities and rising insurance risks created uncertainty and bottlenecks for vessels in and around the Persian Gulf. As tensions escalated, shipping companies once again began diverting vessels along the Cape route to avoid the high-risk zones of the Middle East.

The wider regional conflict further heightened these concerns. Iran fired missiles towards Cyprus in the eastern Mediterranean, while a US submarine reportedly sank an Iranian naval frigate in the Indian Ocean south of Sri Lanka. The growing maritime dimension of the conflict reinforced the perception that the traditional northern shipping corridors were becoming increasingly dangerous.

If hostilities continue to spread, the events of March 2026 could represent a turning point in how global shipping views the Cape route. Rather than serving merely as a temporary diversion during crises, the route may increasingly become a regular pathway for international trade.

Having studied maritime security events around Africa for more than 15 years, it is clear that the repeated rerouting of shipping calls for a shift in thinking. Instead of treating the Cape route as an emergency alternative, policymakers and shipping stakeholders may need to view it as a strategic maritime corridor that requires sustained investment and management.

Shipping companies, crews and governments all share an interest in ensuring that the route around Africa is both safe and efficient. Achieving that goal requires careful attention to the risks along the route and how they can be mitigated.

African countries — particularly South Africa, with its position between the Atlantic and Indian Oceans — have an important role to play in shaping the future of this maritime corridor. Their ports, services and security arrangements could help determine whether the Cape route becomes a dependable global shipping artery.

A route with historical roots

The Cape sea route is far from new. Before the opening of the Suez Canal in 1869, it was the primary route linking the Atlantic and Indian Oceans and connecting Europe with Asia. Although the Suez Canal dramatically shortened travel distances between Europe and Asia, it has repeatedly proven vulnerable to geopolitical conflict.

During the Arab-Israeli wars of 1956, 1967 and 1973, the canal experienced major disruptions. After the 1967 war, the canal remained closed for almost eight years, leaving numerous ships trapped inside.

Even in more recent times, the Suez route has faced multiple disruptions. Around 2008, piracy surged off the Horn of Africa, threatening vessels transiting the Gulf of Aden. The deployment of an international naval force of roughly 30 to 40 vessels under a United Nations mandate helped contain the threat. Nevertheless, shipping companies continued to view the route as risky and occasionally diverted vessels around the Cape.

Another reminder of the route’s vulnerability occurred in March 2021, when the container ship Ever Given became lodged in the Suez Canal, blocking the waterway for several days. The incident demonstrated that shipping disruptions can arise not only from conflict, but also from accidents and environmental conditions.

More recently, the Houthi movement in Yemen began attacking selected commercial vessels in the southern Red Sea during 2024, citing solidarity with the Palestinian cause. Using missiles, drones and unmanned maritime craft, the group targeted ships linked to Israel and its allies.

At the height of these attacks, an estimated 66% of shipping traffic between Europe and Asia diverted around the Cape of Good Hope, underscoring the route’s continued importance in times of crisis.

Risks along Cape route

Despite its growing relevance, the Cape route brings its own set of challenges.

One major concern is the harsh sea conditions around the southern tip of Africa. The region is known for powerful storms and rough seas that can increase the risk of containers being lost overboard, creating financial and environmental costs.

A second issue relates to support infrastructure along the route. Sailing around the Cape can add roughly 15 days to a voyage, placing greater importance on access to maritime services such as salvage operations, repair facilities and emergency assistance.

South Africa was once regarded as a key maritime salvage hub, but many of these capabilities have declined over time.

A third concern involves port infrastructure and efficiency in African harbours. Ships forced to enter ports unexpectedly for repairs or supplies may encounter operational inefficiencies and service delivery challenges, increasing delays and costs.

Together, these factors create a distinct set of risks that must be addressed if the Cape route is to support growing volumes of global trade.

Securing the route

Managing these risks will require stronger cooperation between African governments, maritime authorities and the international shipping industry.

Partnerships will be essential to improve port infrastructure, expand maritime services and strengthen safety systems along the route. These improvements could include modern bunkering facilities, enhanced search and rescue operations, and the revival of specialised maritime salvage capabilities.

While naval patrols remain important, maritime security does not depend solely on military solutions. Cooperation between navies, coast guards and civilian maritime agencies will be critical in addressing non-traditional threats such as smuggling, piracy and environmental hazards.

Ultimately, securing the Cape route should not fall solely on South Africa. Maritime safety and trade security require regional cooperation among African states, as well as partnerships with international stakeholders who depend on safe global shipping lanes.

If conflict and instability continue to affect the Middle East and the Red Sea corridor, the Cape sea route could become an increasingly central artery of global trade.

Ensuring that it is safe, efficient and well supported may soon become a strategic priority not only for Africa, but for the global economy itself.  – The Conversation

Comment

MUNICIPALITIES IN A FINANCIAL CRUNCH 

South Africa’s municipalities are facing a deepening financial crisis that is steadily eroding their ability to deliver even the most basic services. Across the country, particularly in townships and smaller urban centres, residents are confronting a daily reality of dry taps, crumbling roads and dark streets caused by broken street lights that remain unrepaired for months or even years.  The worsening municipal debt crisis – currently estimated at R160, 8 billion –  is not only a financial problem,  it is a social and governance crisis that threatens the foundations of local democracy. Creditors included Eskom which is owed about R110 billion.

Municipalities occupy the frontline of service delivery. They are responsible for providing water, maintaining roads, managing waste and ensuring that basic infrastructure functions properly. Yet many municipalities are drowning in debt, owing billions of rand to creditors such as Eskom and water boards. Instead of investing in maintenance and infrastructure upgrades, scarce revenue is increasingly consumed by debt repayments, interest charges and operational inefficiencies. The consequences are visible in almost every township. Roads riddled with potholes are seldom repaired, making transport difficult and damaging vehicles. Street lights remain dysfunctional, leaving neighbourhoods in darkness and creating conditions that encourage crime.

Most alarming of all is the frequent disruption of water supplies, forcing communities to rely on water tankers or unsafe alternative sources. In a country where access to water is a constitutional right, such failures represent a profound breakdown of governance. Several factors lie behind this crisis. These include poor financial management, corruption and weak administrative capacity which have hollowed out many municipal institutions. In some cases, revenue collection systems are ineffective, meaning that municipalities fail to collect payment for services from those who can afford to pay.  In others, political interference and cadre deployment have placed inexperienced or unqualified individuals in key management positions, undermining accountability and competence.

The result is a vicious cycle. As services deteriorate, residents lose trust in local government and become less willing to pay for municipal services. This further reduces revenue, pushing municipalities deeper into debt and further weakening their ability to maintain infrastructure. Without decisive intervention, this downward spiral will continue.

National and provincial governments cannot afford to look away. Stronger financial oversight, professional management and strict accountability measures are urgently needed. Municipal leadership must be based on competence rather than political loyalty and corruption must be confronted with real consequences. South Africa’s municipal crisis is a warning sign of a broader institutional decline. If municipalities cannot repair roads, keep street lights working or ensure reliable water supplies, the promise of local democracy loses its meaning. The country’s future depends on rebuilding capable local governments that can deliver the services citizens depend on every day. Without urgent reform, the debt crisis threatening municipalities will continue to undermine both development and public trust. The government must move swiftly to   address the serious issues affecting these ailing municipalities which are on the verge of collapse.