Cape of Good Hope

The Cape of Good Hope is the southern tip of Africa around which ships can route to avoid both the Strait of Hormuz and the Red Sea (Suez Canal route). During the 2026 crisis, shipping companies increasingly rerouted via the Cape, adding 10–15 transit days and significantly increasing costs. However, the volume of oil normally transiting Hormuz (20M barrels/day) is far too large for Cape routing to fully substitute. The Dallas Fed projected that sustained 20% global supply removal would push WTI to $98/barrel even with Cape rerouting.

Connections

• Shipping Disruption — alternative but insufficient route
• Oil Price Impact — rerouting costs contributed to price elevation
• Strait of Hormuz — avoided chokepoint