Malacca Strait unlikely to become next 'toll station' like Hormuz, experts say

Concerns are mounting among investors that the Malacca Strait could become the next "toll station" for global trade, mirroring potential actions in the Strait of Hormuz. However, experts largely dismiss this possibility, citing robust "institutional safeguards" that protect the waterway.

The anxiety stems from Iran's plan to jointly manage and charge administrative fees in the Strait of Hormuz with Oman. This move has fueled speculation that similar tactics could be employed in other critical maritime chokepoints. The Malacca Strait, a vital artery for global commerce, is seen as the next most crucial target due to its immense trade volume.

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The Malacca Strait has solid "institutional safeguards" and the probability of it becoming a toll station is extremely low.

Data from the U.S. Energy Information Administration highlights the Malacca Strait's irreplaceable role as a primary maritime route connecting East Asia with the Middle East and Europe. Stretching approximately 900 kilometers and bordered by Indonesia, Thailand, Malaysia, and Singapore, it handles a substantial portion of global oil sea traffic. In the first half of 2025, it accounted for 29% of global oil flows, with crude oil making up over 70% of this volume.

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Some investors are feeling "a bit nervous" about the potential oil impact in the Malacca Strait.

Despite investor jitters, maritime and geopolitical experts emphasize the fundamental differences between the Malacca Strait and the Strait of Hormuz. The Malacca Strait is managed by a multilateral mechanism involving Indonesia, Malaysia, Singapore, and Thailand, known as the Malacca Strait Patrol (MSP). This cooperative arrangement ensures the waterway's continuous openness for global trade, unlike the Strait of Hormuz, which is more susceptible to arbitrary closures.

Furthermore, international law guarantees freedom of passage through international straits, rendering the establishment of a toll system illegal. Recent reaffirmations of commitment to unimpeded passage by the leaders of Indonesia and Singapore underscore this principle. Analysts also point to the heightened tensions in the South China Sea, warning that any disruption to either the Malacca Strait or the Taiwan Strait would result in substantial logistical and time costs for the global economy, even with alternative routes available.

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This arrangement benefits all parties and the global economy. Without this mechanism, the Malacca Strait would be vulnerable to arbitrary closure, like the Strait of Hormuz.