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Your ISP can log and analyze all SMTP traffic if they want to, whether it's being processed by their mail relays or not.

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I believe most SMTP servers talk SSL/TLS, so, yes, sending mail directly to an SMTP server that doesn't belong to the ISP prevent the ISP from reading the mail.

Well sure, but if you're worried about traffic analysis you've got bigger problems. The difference here is that if you relay through your ISP they can read the contents of your messages. If you don't, they can't.

But this is the fault of the party you'd like to connect to; they are the ones refusing your direct SMTP connection because your IP address smells funny so that you have to resort to forwarding.

Maybe it's possible to work things out with particular such destinations. If there are certain parties to whom you'd like to send mail more securely, maybe they can give you an account on their SMTP server.

To everywhere else you go through your SMTP provider.

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