While recent global attention has focused on the Strait of Hormuz, which Iran has effectively held closed since late February in a move that has disrupted world energy supplies, a quieter but also important development has been taking shape in south-east Asia.
On April 14, the US and Indonesia announced a “major defence cooperation partnership”, strengthening their military ties. According to reports, the US is also seeking to gain wider access to Indonesian airspace. Several media outlets say Indonesia’s president, Prabowo Subianto, has approved the proposal.
These developments matter because Indonesia’s vast archipelago sits astride some of the most critical sea routes in the world. These include the Strait of Malacca, an important chokepoint for global shipping and trade. The region surrounding Malacca has seen growing military attention from outside powers in recent years.
Both the US and China have been steadily expanding their military presence around the strait and its approaches. The US has largely done so through base access and naval deployments, and China through its port network and naval buildup. The Andaman and Nicobar Islands, located near the strait’s western approaches, also provide India with a strategic presence in the region.
South-east Asia is becoming more explicitly tied into great-power competition, with the new US-Indonesia defence partnership adding the latest layer. Should this competition intensify – whether through a crisis in Taiwan, a spillover from Hormuz or a shift in alliances – the Strait of Malacca would be at the centre of it.
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The strait is the shortest sea route connecting the Indian Ocean to the South China Sea and Pacific Ocean, making it the default corridor for trade between east Asia and the west. It stretches roughly 900km from the Malay Peninsula to the Indonesian island of Sumatra. At its narrowest point, the Phillips Channel near Singapore, it is barely 2.8km wide.
Almost 24% of global seaborne trade by volume flows through the strait. It carries 45% of the world’s seaborne oil, over 25% of all cars traded internationally and 23% of dry bulk cargo including key agricultural commodities like grains and soybeans. A large portion of European imports of electronics, consumer products like footwear and toys, machinery and industrial goods pass through the strait in sea containers as well.
The strait is also home to some of the world’s most critical port infrastructure. Singapore, located at the strait’s southern entrance, is the second-busiest container port and the busiest container transshipment hub on the planet. It handles over 40 million containers a year and is the world’s largest ship refuelling hub. Port Klang in Malaysia ranks among the world’s top ten container ports too, handling 14 million containers annually.
Why Malacca is irreplaceable
The most commonly cited detours around the Strait of Malacca, the Sunda and Lombok Straits, both lie within Indonesian territory and neither is a straightforward substitute. Rerouting through either adds roughly 1,000 to 1,500 nautical miles to the journey – three to five extra days at sea – along with higher fuel costs and the loss of Singapore’s refueling infrastructure.
Beyond Indonesia, the Torres Strait near Papua New Guinea is too shallow for large commercial vessels with a draft of over 12 metres. Ships avoiding all these routes would face a detour around the entire Australian continent, adding another ten to 15 days of transit time. These geographical features are the reason why the Strait of Malacca is so difficult to bypass.
China understands the risk of relying on Malacca perhaps better than anyone. In 2003, the then-president of China, Hu Jintao, coined the phrase “Malacca dilemma” to describe a strategic exposure that has continued since. Between 75% and 80% of China’s imported oil still passes through the strait.
Beijing has invested heavily in alternatives, but none come close to matching the scale of what transits Malacca. Pipelines running from Kyaukpyu on the Bay of Bengal in Myanmar into Yunnan province in China bypass Malacca entirely. However, their capacity is only around 440,000 barrels per day, a small fraction of China’s roughly 11 million barrels of daily oil imports.
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The China-Pakistan Economic Corridor plans to link Gwadar Port on the Arabian Sea to Xinjiang in north-west 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 provide about 10% of its total imported oil.
There are rail freight corridors connecting China to Europe, which avoid maritime chokepoints entirely and are faster than shipping. However, they are far more expensive and very limited in capacity. Arctic shipping routes along Russia’s northern coast offer a longer-term hedge, cutting the distance between Asia and Europe, but remain seasonal and marginal in global trade terms.
For now, there is no clear indication that the growing military presence around the Strait of Malacca will have any impact on commercial shipping. But if a conflict does arise in the future, it will be trade-dependent economies like China that will suffer.
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