The global energy market and international trade are on a tightrope, as the "control model" that Iran is attempting to impose on the Strait of Hormuz threatens to trigger a dangerous domino effect across the planet's primary maritime arteries. Investors are watching developments with bated breath, as fears over the imposition of arbitrary "tolls" are now shifting to Asia, specifically to the Straits of Malacca. This is humanity's most critical commercial passage, through which nearly 30% of global oil is trafficked. A potential "suffocation" or financial blackmail at this particular point would not just cause an unprecedented energy shock, but threatens to blow up the global supply chain.
The risk of tolls in Malacca
Iran's attempt to gain control over the Strait of Hormuz has caused concern among certain energy market participants regarding the potential imposition of tolls in the Strait of Malacca, one of the most critical choke points for energy and trade worldwide. This development follows reports according to which Iran and Oman, located on opposite sides of Hormuz, presented a proposal to the US for the joint management of the narrow maritime corridor, including the collection of administrative fees. The US and Iran agreed on a memorandum of understanding last month that vessels could sail safely and freely through the waterway for 60 days. Hormuz typically handles about 20% of global oil transit. After that, the future management and shipping services of the straits will be determined by Iran and Oman following talks with other Persian Gulf states, "in alignment with current international law and the sovereign rights of the coastal states of Hormuz." The idea of a sort of service provision plan for transit through Hormuz has sounded the alarm worldwide, especially among investors who fear that this could be repeated in other strategically vital maritime corridors.
Analysts' estimates
However, shipping experts stated that they remain deeply skeptical regarding the prospect of introducing fees in the Strait of Malacca. Janiv Shah, vice president of commodity markets at Rystad Energy, stated that some investors are starting to get "a bit nervous" at the prospect of an oil shock in the form of tolls in Malacca. "I think part of the reason here is that if we look at a potential toll station with Iran implementing, in a way, something like that in the Strait of Hormuz, something similar could be applied to others, and of course, the most important in terms of volume is... the Straits of Malacca," Shah stated speaking to CNBC. "The way it will be implemented, of course, unfortunately, I am not in a position to share more about that, but it will probably take a long time because, in terms of volume, it is significant," he added.
The role of the Strait of Malacca
The Strait of Malacca, which constitutes the primary bottleneck in Asia and Oceania, accounted for 29% of total maritime oil flows during the first half of 2025, according to the US Energy Information Administration (EIA). Crude oil is estimated to make up more than 70% of total oil flows through the waterway each year, with petroleum products covering the remaining percentage. Stretching approximately 900 kilometers, the waterway provides the shortest maritime route from East Asia to the Middle East and Europe. It is surrounded by Indonesia, Thailand, Malaysia, and Singapore. In April, Indonesia's Minister of Finance, Purbaya Yudhi Sadewa, hinted that the country could introduce tolls for ships using the Strait of Malacca, before recalling the idea. Indonesia's coastline constitutes the entire southern boundary of the Straits of Malacca.
What international law provides
The establishment of a toll system would be illegal under international law, which guarantees free passage through straits used for international navigation. Indonesian President Prabowo Subianto and Singaporean Prime Minister Lawrence Wong both reaffirmed their commitment to the unimpeded passage of ships through the straits, shortly after their meeting in the Indonesian capital on Monday. Hunter Marston, director of the Southeast Asia program at the Sydney-based Lowy Institute, noted in a memo published on June 23 that although the Strait of Malacca "easily" fits the definition of a choke point, it does not constitute a geopolitical flashpoint. "Institutions matter," Marston stated, pointing out that the Malacca Strait Patrol (MSP) ensures that the waterway remains open to global trade. The MSP is jointly managed 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 just as vulnerable to arbitrary closures as the Strait of Hormuz," he added.
Rerouting options
Analysts at the Center for Strategic and International Studies (CSIS), a Washington-based think tank, stated that Iran's actions regarding Hormuz showed that control of a maritime bottleneck could "significantly increase" a country's power and deterrent capability. The stakes are "even higher" in the South China Sea, CSIS analysts noted, particularly given the existence of two strategically vital waterways connecting many of the world's major economic centers: specifically, the Strait of Malacca and the Taiwan Straits. "Iran's efforts to control and impose tolls on traffic through the Strait of Hormuz have reignited fears that states might try to do the same in the Strait of Malacca. China's threats to use force against Taiwan have also put the Taiwan Straits at the center of one of the world's highest-risk geopolitical hot spots," the CSIS analysts noted in an analysis published on July 1. "If the operation of either of these two major straits is disrupted, there are rerouting options, but these will come at some cost," they added.
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