The toll risk hanging over oil markets
A view of Belawan Port in the Straits of Malacca, waters off Medan, North Sumatra, Indonesia, on April 28, 2026.
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Iran’s effort to control the Strait of Hormuz has caused some energy market participants to worry about the imposition of a toll on the Strait of Malacca, one of the world’s most important energy and trade chokepoints.
Like this: reports It was stated that Iran and Oman, located on the opposite side of the Strait of Hormuz, made an offer to the USA to jointly manage the narrow sea corridor, including the collection of administrative fees.
With the memorandum of understanding signed last month, the USA and Iran decided that ships could navigate the waterways safely and freely for 60 days. The Strait of Hormuz generally handles about 20% of the world’s oil traffic.
From now on, the future administration and maritime services of the strait will be determined by Iran and Oman, “in line with valid international law and the sovereign rights of the states bordering the Strait of Hormuz”, after negotiations with other Persian Gulf countries.
The idea of some kind of service plan for transit through the Strait of Hormuz has sparked alarm around the world, particularly from investors who fear it could be replicated in other strategically vital maritime corridors.
However, maritime experts said they remained deeply skeptical about the possibility of levies being introduced in the Strait of Malacca.
Janiv Shah, vice president of commodity markets at Rystad Energy, said some investors were becoming “a little uneasy” about the possibility of an oil shock in the form of tolls across the Strait of Malacca.
“One of the reasons for this is that if we see a potential toll with Iran on the Strait of Hormuz, something similar could apply to others, and of course the most important from a volume metric perspective is the Strait of Malacca,” Shah told CNBC’s “Squawk Box Europe” on Monday.
“Obviously I can’t share a little more information about the way this is enacted, but it’s probably going to take a lot of time because volume is important from a metric perspective,” he added.
The Strait of Malacca, the main transit point of Asia and Oceania, calculated It will account for 29% of total offshore oil flows in the first half of 2025, according to the US Energy Information Administration.
It is estimated that crude oil accounts for just over 70% of the total oil flow through the waterway each year, with petroleum products accounting for the remainder.
Spanning approximately 900 kilometers, the waterway provides the shortest sea route from East Asia to the Middle East and Europe. It borders Indonesia, Thailand, Malaysia and Singapore.
Strait of Malacca: Not a flash point, but a choke point
Indonesian Finance Minister Purbaya Yudhi Sadewa in April recommended The country could impose tolls on ships using the Strait of Malacca before backing off the idea. Indonesia’s coastline forms the entire southern end of the Strait of Malacca.
Establishing a toll system that guarantees free passage through straits used for international navigation would be illegal under international law.
Indonesian President Prabowo Subianto and Singapore Prime Minister Lawrence Wong confirmed again Their commitment to unhindered passage of ships through the strait shortly after a meeting in the Indonesian capital on Monday.
Hunter Marston, director of the Southeast Asia program at the Sydney-based Lowy Institute. in question A note published on June 23 stated that although the Strait of Malacca “easily” meets the definition of a choke point, it is not a flashpoint.
“Institutions are important,” Marston said, noting that the Malacca Strait Patrol (MSP) ensures that the waterway remains open to global trade. MSP is jointly administered by four states: Indonesia, Malaysia, Singapore and Thailand.
“This arrangement benefits all parties as well as the global economy. Without this institution, the Strait of Malacca would be as vulnerable to capricious closures as the Strait of Hormuz,” he added.
Redirect options
Analysts at the Center for Strategic International Studies (CSIS), a Washington-based think tank, said Iran’s actions regarding the Strait of Hormuz show that controlling a chokepoint in the sea can “significantly increase” a country’s power and deterrence.
Analysts at CSIS said the risk in the South China Sea is “even higher,” especially given the presence of two strategically important waterways connecting the world’s major economic centers, the Straits of Malacca and the Taiwan Strait.
Merchant ships are anchored off Sultan Qaboos Port around Qaboos Port in Muscat, Oman, on June 21, 2026.
Elke Scholiers | Getty Images News | Getty Images
“Iran’s efforts to control and charge traffic in the Strait of Hormuz have renewed fears that states may seek to do the same to the Strait of Malacca. China’s threats to use force against Taiwan have also placed the Taiwan Strait at the epicenter of one of the world’s riskiest geopolitical hotspots,” analysts at CSIS said. analysis It was released on July 1.
“If either of these two major straits is disrupted, rerouting options are available, but they will come at a cost,” they added.
