The Strait of Malacca, in Southeast Asia, connects the Andaman Sea, in the Indian Ocean, to the South China Sea, in the Pacific. It is one of the most important sea passages in the world.
The irreplaceable Strait of Malacca could be the next flashpoint for global trade.
While global attention has recently focused on — which Iran has been effectively shut down since the end of February, in a maneuver that has disrupted global energy supplies — a more discreet but equally important development has been taking shape in the Southeast Asia.
On April 14, the United States and Indonesia announced an “important defense cooperation partnership”, strengthening their military ties. According to reports, the US is also seeking to gain wider access to Indonesian airspace. Several media outlets claim that Indonesian President Prabowo Subianto approved the proposal.
These developments are relevant because the vast Indonesian archipelago lies over some of the world’s most critical shipping lanes. Among them is , a crucial bottleneck for global shipping and trade.
The region around Malacca has attracted a growing military attention of external powers in recent years. Both the US and the China have been steadily expanding their military presence around the strait and its approaches. The US has done this primarily through access to bases and naval deployments, while China has done this through its port network and naval reinforcement.
The Andaman and Nicobar Islands, located near the western approaches to the strait, also give birth India a strategic presence in the region.
Southeast Asia is becoming more explicitly linked to great power competition, with the new defense partnership between the US and Indonesia adding the latest layer. If this competition intensifies — whether through a crisis in Taiwan, a spreading Hormuz crisis or a change in alliances — the Malacca Strait would be at the center of events.
The strait is the shortest sea route connecting the Indian Ocean with the South China Sea and the Pacific Ocean, making it the natural corridor for trade between East Asia and the West. It extends over approx. 900 kilometersbetween the Malay Peninsula and the Indonesian island of Sumatra. At its narrowest point, the Phillips Canal near Singapore is only about 2.8 kilometers wide.
Almost 24% of world maritime trade in volume passes through the strait. They pass through there 45% of oil transported by sea in the world, more than 25% of all automobiles traded internationally and 23% of dry bulk cargoincluding essential agricultural products such as cereals and soybeans. A large part of European imports of electronics, consumer goods such as shoes and toys, machinery e industrial products it also passes through the strait in shipping containers.
The strait is also home to some of the most critical port infrastructure in the world. Singapore, located at the southern entrance to the strait, is the second busiest container port and the largest container transshipment center on the planet. Move more than 40 million containers per year and is the world’s largest ship fueling center. Port Klang, in Malaysia, is also among the ten largest container ports in the world, handling 14 million containers per year.
Why Malacca is irreplaceable
The most frequently pointed out diversions to the Strait of Malacca, the Sunda and Lombok Straitsare both on Indonesian territory and neither of them constitutes a simple alternative. Rerouting ships through either of them adds about 1,000 to 1,500 nautical miles to the journey — another three to five days at sea — as well as higher fuel costs and the loss of Singapore’s refueling infrastructure.
Beyond Indonesia, the Torres Straitnear Papua New Guinea, is too shallow for large commercial ships with a draft of more than 12 meters. Ships avoiding all of these routes would have to detour around the entire Australian continent, adding plus ten to 15 days of transit.
China understands perhaps better than any other country the risk of depending on Malacca. In 2003, the then Chinese President, Hu Jintao, coined the expression “Malacca dilemma” to describe a strategic exhibition that has been maintained since then. Between 75% and 80% of oil imported by China continues to pass through the strait.
Beijing has invested heavily in alternatives, but none come close to the scale of the traffic that passes through Malacca. The oil pipelines that run from Kyaukpyu, in the Bay of Bengal, in Myanmar, to the Chinese province of Yunnan completely bypass Malacca. However, its capacity is only about 440,000 barrels per day, a small fraction of the approximately 11 million barrels of oil that China imports daily.
O China-Pakistan Economic Corridor plans to connect the port of Gwadar on the Arabian Sea to Xinjiang in northwest China through road, rail and energy infrastructure. But it remains only partially developed, with its completion affected by difficult terrain and security challenges in parts of Pakistan. China has also diversified through Central Asian oil and gas pipelines, which supply about 10% of its total imported oil.
There are rail freight corridors that connect China to Europe, completely avoiding maritime chokepoints and being faster than transport by ship. However, they are much more expensive and have very limited capacity. Arctic shipping lanes along Russia’s northern coast offer longer-term protection, shortening the distance between Asia and Europe, but remain seasonal and marginal in terms of global trade.
For now, there is no clear indication that the growing military presence around the Strait of Malacca will impact commercial shipping. But if conflict does erupt in the future, it will be trade-dependent economies like China that will be most affected.
