Transitive routing in public cloud

Some embodiments provide a centralized overlay-network cloud gateway and a set of centralized services in a transit virtual cloud network (VCN) connected to multiple other compute VCNs hosting compute nodes (VMs, containers, etc.) that are part of (belong to) the overlay network. The centralized overlay-network cloud gateway provides connectivity between compute nodes of the overlay network (e.g., a logical network spanning multiple VCNs) and compute nodes in external networks. Some embodiments use the centralized overlay-network cloud gateway to provide transitive routing (e.g., routing through a transit VCN) in the absence of direct peering between source and destination VCNs. The overlay network, of some embodiments, uses the same subnetting and default gateway address for each compute node as the cloud provider network provided by the virtual private cloud provider.