The Peter Zeihan Podcast Series - Say Goodbye to the World's Trade Routes || Peter Zeihan

Episode Date: October 6, 2025

At this critical decade, how will the globes trade routes fare? And which routes will fracture first?Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://bit.ly/3IIn4mn

Hey all, Peter Zine here. Come to you from the Lost Creek Wilderness. I have moved out of the jump on I'm into the narrows. It's like a one-sided canyon sort of thing. Anyway, trail goes back in there somewhere. Anyway, taking a question from the Patreon crowd, specifically as globalization breaks down and as military alliances fracture, which trade route will fracture first become unusable. We're at the point in history where there's a lot of things going wrong at the same time.

Most of my work has been saying that all of these factors, whether it's demographics, de-globalization, American isolationism, European fractures, the Chinese fall, whatever it happens to be. They all come together in about the same 10-year period. We have now entered that 10-year period. So the partial cop-out to answering this question is I really don't know because everything is going wrong and all of these roots are going to be in some degree of danger. But let me give you the two that I think, well, let me do the three that I think are most concerning. First, the one that I think actually will hold together, and that's the Southeast Asian route through Indonesia, Malaysia, Singapore, Strait of Malacca, the Linda Strait, that area, basically connecting Northeast Asia with the rest of the Eurasian continent. This is an area with 15 countries, all of which have their own ideas of what should happen, and none of them have the ability to project naval power far enough to direct the entire zone. The reason that I think it's still going to work out for this area, though, is that most of those countries in ASEAN and then linked into, say, Australia, see the world through similar lenses. I don't anticipate them launching wars of

aggression against their neighbors. They know that they occupy different parts of the manufacturing supply chain. They know they need interregional trade and agriculture and energy and intermediate manufactured parks. So they have a vested industry in finding a way to make it work. The problem would be countries from out of region, India, China, Japan, who might see things differently. But even here, I think it's pretty safe to say that it's going to hold. Japan might try to raid Chinese shipping, but they have no intention of shutting down shipping through the region as a whole. With Australia, have the Americans evolve to a degree, and India is really not a trading power. And China, of course, if it's going to survive in any form, has to have access to this trade route.

So that one's probably okay. The second one, the one's absolutely hose, so opposite, is coming out of the Persian Gulf. Here you've got a number of countries with limited naval reach, but missiles and jets and drones would have no problem closing the Strait of Hormuz. And even if you get past a Strait of Hormuz, you then have Indian Pakistan, who in a de-globalized world would love to see the other one lose access to things like energy. And so I can see any number of scenarios where Iran or Pakistan or India or Saudi Arabia or even the United Arab Emirates find it in their interest, at least for periods of time to close that entire route down. And that's 20 million barrels a day of crude that could no longer make it to market. It would have catastrophic impacts for everyone further east, most notably Japan, Korea,

Taiwan and especially China, which uses more than the other three put together. And then the third route, depends on what happens in the Ukraine war. The Baltic Sea has always been a zone of commerce, but it's always been a zone of conflict. And in times past, the countries that are either adjacent to the sea or just one step removed, so we're talking here, all of the Scandinavian countries, Finland, Sweden, Norway, Denmark, also Poland, also Germany, also the United Kingdom, also the Balt and also Russia. have all at various times in their history tried to militarize their part of the sea to shut it down for other people. At the moment, everyone is on the same side except for the Russians.

And the Russians are using the Baltic Sea, because we're still in globalization, barely, to ship a million to a million and a half barrels of crude out to the wider world around sanctions. Sooner or later, that's not going to work anymore. Either the Western countries are going to interfere with the oil shipments, which I'm a little surprised. It hasn't happened already. Or the Russians are going to say, screw it and basically mess up corporate shipping on the Baltic Sea. One way or another, this is likely to happen. The question is how long can it last? If Russia does well in Ukraine, it can last a long time because you don't need to be able to poke out all that much.

If Russia collapses in Ukraine, that this is no longer a concern. And the issue is how Europe evolves or devolves in the future, which can go any number of directions. So Middle East shipments, most notably through Hormuz, look really bad. Red Sea's not much better. Baltic is something to keep an eye on, but there's reason for hope. And then Southeast Asia, that'll only break if things go really horribly bad.