(Bloomberg) — Iranian and U.S. blockades of the Strait of Hormuz are reviving fears over the fate of Asia’s most crucial strategic bottleneck.
The Strait of Malacca between Indonesia, Malaysia and Singapore connects the Indian and Pacific oceans with a channel just 2.7 km long at its narrowest point, more than 10 times narrower than Hormuz. It carries roughly 40% of global trade, including most oil flows from the Middle East to Asian economic powerhouses including China, Japan and South Korea.
Guarded by the US Navy’s Seventh Fleet, the strait has long been identified by Chinese leaders as a vulnerability in a war scenario, with the “Malacca Dilemma” popularized during Hu Jintao’s presidency in the early 2000s. The picture is further complicated by competing territorial claims, China’s increased ability to project military power beyond its shores, and the unpredictability of US President Donald Trump.
In announcing his blockade, Trump said he had ordered the US Navy to interdict any vessel in international waters that had paid a toll to Iran. Although few ships seem to be passing through so far, the seas in and around the Malacca Strait have been a key area where Iran’s dark fleet has transferred oil to other vessels to disguise sales to countries in Asia, mostly China.
“While I would not point to any clear and present danger that now exists for the Straits of Malacca, anyone concerned about arming maritime chokes should think ahead about how to manage its geopolitical vulnerability,” said Chuin Wei Yap, program director of international trade research at the Hinrich Foundation in Singapore. “What seems unthinkable today should not be taken for granted.”
As the Strait of Hormuz has closed in recent weeks, tensions have risen in Southeast Asia. Singapore strongly opposes negotiations with Iran over the Hormuz toll, Malaysia defends its talks with the Islamic Republic, and Indonesian President Prabowo Subianto touts his nation’s proximity to the Malacca Strait as a source of its geopolitical power while deepening military cooperation with the US.
“Do we realize how important Indonesia is? How strategic and key is our position?” Prabowo said in a speech to Indonesian officials last week, stressing that roughly 70% of East Asia’s energy and trade passes through Indonesian waters, including the Strait of Malacca. “We have to understand that we are always the center of the world’s attention.”
Shortly after, Indonesia’s defense ministry confirmed it was considering a Trump administration proposal that could allow the US military to fly over Indonesian airspace. This sparked a debate within the country’s military establishment.
Arm Oke Kistiyanto, a colonel in the Indonesian armed forces, published a lengthy assessment on a military website suggesting the overflight agreement could drag the nation into regional contingencies beyond its control, posing a “risk of entrapment”.
“Airspace is a key domain of state sovereignty,” he wrote. “When a major power requests access to this domain, what is at stake is not only the permission to pass, but also the strategic importance of this permission: who gets the operational benefits, how other countries interpret it, and whether the decision is in line with Indonesia’s foreign policy orientation.”
The assessment “reflects internal resistance,” said Anastasia Febiola S., an Indonesian defense expert and Mirage Defense’s Indonesia manager. “For Indonesia, it is a matter of reputation, if not pride, of other countries’ respect for Indonesia’s sovereign rights and interests.”
One Indonesian government official with knowledge of defense matters, who requested anonymity to discuss sensitive issues, said the new deal with the US is more about expanding existing cooperation than a strategic shift. Indonesia’s priority is to keep the strait stable and conflict-free, and it does not want to be seen as easing US pressure on other countries, the official said.
A spokesman for Indonesia’s defense ministry said in a statement that the US deal would open up “more targeted opportunities in defense modernization, capacity building, professional military education and training, as well as exercises and operational cooperation”.
“All its implementation remains within the framework of national interests, a free and active foreign policy, respect for national sovereignty and in accordance with the official mechanisms of the Indonesian government,” the spokesman said.
Separately, a spokeswoman for Indonesia’s foreign ministry said the overflight proposal was still under consideration and “there is no policy to allow any foreign party unrestricted access to use Indonesian airspace.”
While Hormuz remains the world’s most sensitive energy artery, carrying around a fifth of global oil flows, Malacca is the primary conduit for Asia’s manufacturing and energy supply chain, with around 82,000 vessels transiting annually. The Strait of Malacca is also more than five times longer than the Strait of Hormuz, providing plenty of room for intrusion.
The maritime security debate extends beyond Indonesia, and the Hormuz crisis exposes diverging philosophies between Singapore and neighboring Malaysia.
Responding to a question in Parliament last week on whether the city-state would ever negotiate with Iran for safe passage or payment of tolls, Singapore’s Foreign Minister Vivian Balakrishnan stressed that transit passage is guaranteed by international law and that any such arrangement would set a dangerous precedent for the Straits of Malacca.
“It’s not a privilege to be granted by the border state, it’s not a license to apply for, it’s not a toll,” he told lawmakers. “Ships have the right to pass.
The comments outraged some in Malaysia, which recently secured passage for its ships through Hormuz following high-level talks between Malaysian Prime Minister Anwar Ibrahim and Iranian President Masoud Pezeshkian.
“Malaysia will not be lectured on the merits of engagement,” Nurul Izzah Anwar, Anwar’s daughter and vice-president of the ruling People’s Justice Party, said in response to Balakrishnan’s comments. “We chose dialogue because history has shown that non-engagement breeds escalation.”
–With help from Shadab Nazmi.
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