The alternative to the Strait of Hormuz economy: Territorialism vs. globalism

For centuries, the heart of global trade has beaten along maritime routes, particularly through narrow waterways. However, the events unfolding in the Strait of Hormuz—one of the most sensitive and critical arteries of this fragile order—reveal once again the immense geopolitical risk inherent in transoceanic supply chains. The reality that trade conducted through the Strait of Hormuz ultimately relies on maritime transport makes the entire process dependent on a specific centralized control mechanism.

The deepest link in this dependency is undoubtedly formed by financing and insurance activities. While the largest cost burdens of maritime trade are fuel and insurance expenses required for freight contracts, the main backbone of this market is held by UK-based entities, led by the London-based insurance giant Lloyd’s of London. The risk appetite of global maritime trade, policy cancellations, or exorbitant price hikes are shaped directly by the decisions of this center. In contrast to this control mechanism of the globalist system, countries acting on a territorialist axis do not yet have a fully accepted alternative insurance and financial architecture on a global scale; nor have strong candidates been able to break this monopoly yet.

Yet, the essence and most vital part of the trade conducted through the Strait of Hormuz consists of energy raw materials. And it is perfectly possible to transport these raw materials via pipelines or directly by land instead of floating them on the oceans in giant tankers. Moreover, the cost-effectiveness of this method is much more advantageous compared to maritime transport. Pipelines offer two route alternatives: land and sea. However, pipelines laid under the sea, as clearly seen in the past, present a highly vulnerable and risky profile against underwater drones and sabotage.

Pipelines built on land, of course, do not carry zero risk; threats of sabotage and attacks against these lines are always present. However, due to the understanding of sovereignty at the core of territorialism, it is much easier to take precautions against such attacks and establish security in a land geography compared to a maritime environment. Furthermore, it is possible to clearly identify who carried out a potential sabotage or attack and their logistical background through geographical control on land, compared to the middle of the ocean or desolate waters.

Realizing energy supply via land routes and pipelines brings with it two major economic and strategic advantages that will fundamentally change the geopolitical equation. First, it ensures that countries along the route of the pipelines have much cheaper and uninterrupted access to these energy raw materials. Second, and most critical for Turkey, is the massive geopolitical gain offered by its geographical location. A land pipeline shipment originating from Iran and extending to European Union countries and the MENA (Middle East and North Africa) region would provide a great advantage by making Turkey an indispensable hub and main corridor. Even if this energy shipment were to go by sea in an alternative scenario, it would still create a strategic foundation in Turkey's favor, as the route would necessarily pass through maritime jurisdiction areas within Turkey's Blue Homeland.

This picture has a clear winner and loser. The United Kingdom, which keeps geographies and economies under control through the insurance monopoly of global maritime trade, will lose its power as this system weakens. In contrast, territorialist countries such as Turkey, Iran, and Russia will experience a major leap in geopolitical and economic terms by both securing their own security zones and holding control over energy corridors. The way to unlock the artificial locks on the highways of the seas is to invest in the sovereignty of the land and its secure lines.