Strait of Malacca shipping: the world's largest oil chokepoint

Strait of Malacca shipping carries more oil than any other chokepoint on earth: 23.2 million barrels per day of crude and refined products in the first half of 2025, equal to 29% of all seaborne oil trade, according to the EIA. It is also the busiest passage by vessel count, with 102,525 transits recorded in 2025 by Malaysia's Marine Department, an 8.7% jump on 2024. The waterway runs roughly 900 km between Sumatra and the Malay Peninsula and narrows to 1.7 miles at the Phillips Channel near Singapore, with charted depths of about 25 metres in the shallowest stretches.

Volumes through the strait collapsed in 2026 without a single incident occurring inside it. Oil flows fell to 16.6 mb/d in the second quarter of 2026 from 23.8 mb/d a year earlier, and LNG fell from 9.5 to 5.5 billion cubic feet per day, per EIA quarterly tracking. The cause sits 4,000 miles upstream: most of the crude crossing Malacca is loaded in the Persian Gulf and must clear the Strait of Hormuz first, and Hormuz flows dropped to 4.9 mb/d in 2Q26 after the strait was closed to commercial traffic on 28 February 2026. As of mid-September 2026 Hormuz remained effectively shut and Malacca remained open, its throughput set by what never arrives rather than by anything happening in it.

The year also tested the strait politically. Indonesia floated a transit levy modelled on Iran's Hormuz fees in April 2026 and withdrew it within days after Singapore and Malaysia rejected it; Thailand shelved its Land Bridge in July. Both episodes ended where the arithmetic ends: no substitute for this passage exists this decade, only ways to make it more expensive.

Key numbers

What flows through the Strait of Malacca: oil, LNG and everything else

Crude dominates. Crude and condensate ran at 16.6 mb/d in the first half of 2025 against 6.5 mb/d of refined products, and four Persian Gulf OPEC producers, Saudi Arabia, the UAE, Kuwait and Iraq, accounted for close to 60% of the crude, per EIA analysis of Vortexa tracking. Iranian barrels bound for China grew from 0.3 mb/d in 2020 to 1.6 mb/d by 1H25, while Russia supplied only about 2% of the flow. The United States moves oil in both directions through the strait: 0.8 mb/d of Atlantic coast crude eastbound to Asia and 0.2 mb/d arriving on the Pacific coast, mostly from the Middle East.

Gas is smaller but concentrated. LNG averaged 9.2 Bcf/d in 1H25, with Qatari cargoes to China doubling their share of that flow since 2020, from 14% to 28%; Australian and Qatari volumes to Japan, Korea and Taiwan make up most of the rest. See natural gas producers and importers.

Energy is not what makes it the busiest waterway in the world. Container ships were the largest user in 2025 at an average of 74 transits a day, ahead of tankers at 60 and dry bulk carriers at 57, with 13 LNG and LPG carriers, 25 general cargo ships and seven car carriers daily, carrying Australian and Brazilian iron ore and coal, Southeast Asian palm oil and manufactured goods between East Asia and Europe. The limit that governs all of it is draught: at roughly 25 metres, the channel forces fully laden very large crude carriers and the biggest container vessels to lighten or go south around Indonesia. Deeply laden transits, drawing more than 15 metres, run at about 28 a day, a tenth of all traffic, on Nippon Maritime Center analysis of STRAITREP reporting.

Who depends on Strait of Malacca shipping

China is the largest user and the most exposed. It took 48% of the import volumes crossing the strait in 1H25, and Vortexa put roughly 75% of Chinese seaborne crude imports on this route in 2026; the figure usually quoted in the Malacca dilemma literature, coined by Hu Jintao in 2003, is 80%. No other economy concentrates so much of its energy supply in one passage it does not control. China held an estimated 1,492 million barrels of crude inventory at the end of 2Q26, the largest stockpile the EIA tracks, which is the buffer that dependence bought.

Japan, South Korea and Taiwan sit behind the same funnel with thinner buffers. Middle Eastern crude is about 95% of Japanese and 70% of Korean imports, per Kpler, and essentially all of it transits both Hormuz and Malacca. Japanese strategic inventories fell from 263 to 187 million barrels between 4Q25 and 2Q26. Singapore is exposed twice over, as transit economy and as refiner: more than 70% of its crude intake came from the Gulf in 2025, up from about 50% in 2024 after a refinery expansion tilted it toward heavy sour grades.

Alternatives and bypass routes

The strait's importance is defined by how little the alternatives can absorb, and 2026 tested each of them.

Lombok and Makassar. The only credible deep water alternative. Lombok runs deeper than 150 metres with a minimum width near 11.5 miles, so it takes fully laden VLCCs that Malacca cannot, and it already serves Australian iron ore and coal to East Asia. RSIS modelling puts the diversion at roughly US$472,000 per voyage in bunkers and time, with freight rates on Malacca-dependent routes up around 20% if the strait were priced out of reach. Capacity is the harder limit: Lombok handles a few thousand transits a year against more than 100,000 through Malacca, and the anchorages, traffic management and bunkering to absorb a meaningful share do not exist.

Sunda. Shallower, with a minimum depth near 20 metres and strong tidal currents, it serves Cape of Good Hope and Australia traffic rather than working as a relief valve for tankers.

China to Myanmar pipelines. The Kyaukphyu to Kunming crude line, 771 km, opened in 2017 with a design capacity of 22 million tonnes a year, about 440,000 b/d, alongside a 12 bcm a year gas line. It bypasses both Malacca and the South China Sea, and it is the only physical bypass anyone has actually built. It is also small: 440,000 b/d against Chinese crude imports above 11 mb/d, and constrained by the refinery at the far end and by Myanmar's civil conflict, with the Kyaukphyu SEZ works stalled as of mid-2026. Actual throughput in 2025 and 2026 is not publicly reported ⏳.

Thailand's Land Bridge. The Ranong to Chumphon corridor, two deep sea ports joined by 89 km of motorway and rail at 997 billion baht, was revived in 2026 because of Hormuz. A committee chaired by the finance minister reported on 24 July 2026 that the rate of return had fallen from 8% to 4.8%, net present value had turned negative, no major line had committed volume, and double handling every container defeated the distance saved. The cabinet accepted the finding on 5 August 2026 and withdrew the environmental assessments. Its replacement is a 110 km rail link to the existing Ranong port, not a bypass.

Adding it up: one pipeline at 440,000 b/d, one deep water detour costing roughly half a million dollars a voyage, and no canal. Against 23 mb/d and 100,000 ships a year, the strait cannot be replaced, only disrupted, and the disruption of 2026 came from upstream. See crude oil trade routes.

Historical incidents

Assets and companies exposed

Exposure here is less about a closure, which has never happened, than about who absorbs the cost when volumes or premiums move.

Littoral states and ports. Singapore is the commercial keystone: 44.66 million TEU of container throughput, 56.77 million tonnes of bunker sales and 3.22 billion gross tonnes of vessel arrivals in 2025, all records, per the MPA annual report. Malaysia's Tanjung Pelepas handled 14.03 million TEU in 2025. Indonesia controls the Lombok and Sunda alternatives, the leverage behind the April 2026 levy episode.

Tanker and gas carrier owners. VLCC operators on Gulf to Asia routes, Bahri, Frontline, DHT and Euronav among them, and LNG owners including Nakilat, MOL and NYK, run the volumes that fell 30% in 2Q26. Charter rates on the routes that stayed open absorbed the rerouting.

Asian refiners and gas buyers. Sinopec, PetroChina, Reliance, ENEOS, SK Innovation, S-Oil, ExxonMobil and Shell in Singapore, plus Petronet, KOGAS and CPC on the gas side, take delivery at the far end of this passage.

Beneficiaries by displacement. Lombok and Makassar routings, Ranong port, and Chinese overland corridors through Myanmar and Central Asia gain volume whenever the sea route is priced up. Descriptive only: the encyclopedia does not publish recommendations.

What to watch

• Daily transits: IMF PortWatch publishes a daily Malacca count, and STRAITREP reporting to Klang VTS averaged 281 a day in 2025. Sustained readings below that baseline signal upstream loading problems, not local ones.
• Quarterly flows: the EIA's Global Energy Security Data now publishes Malacca oil and LNG volumes by quarter. This is the cleanest read on how much Hormuz disruption is passing through to Asia.
• Hormuz status: the upstream variable. Any durable reopening restores Gulf loadings and Malacca volumes with a lag of weeks, not days.
• Piracy reporting: ReCAAP ISC publishes monthly and annual incident counts for these straits, by location and vessel type.
• Transit fee politics: statements from Jakarta, Kuala Lumpur and Singapore on tolls or cost recovery for navigational aids.
• Bypass infrastructure: throughput on the China to Myanmar crude line, the Ranong rail link, and any revival of the Land Bridge.
• War risk pricing: Malacca is not a Joint War Committee listed area and transits are priced as ordinary trade; a listing, or the first war risk quote written specifically for the strait, would be the hard market signal of direct risk. No such quote was found at the time of writing ⏳.

FAQ

How much oil passes through the Strait of Malacca? About 23.2 million barrels per day of crude and refined products in the first half of 2025, according to the EIA, which is 29% of global seaborne oil trade and more than any other chokepoint including Hormuz. Roughly 70% of that is crude and condensate. Flows fell to 16.6 mb/d in the second quarter of 2026 because the Gulf barrels that feed the route could not leave Hormuz.

Is the Strait of Malacca open right now? Yes. As of mid-September 2026 the strait was operating normally and has never been closed in its modern history. What changed in 2026 is throughput, not access: oil volumes fell about 30% year on year in 2Q26 because Hormuz, where most of the crude originates, has been effectively closed since 28 February 2026.

Can ships avoid the Strait of Malacca? Only at a cost, and not at scale. Lombok and Makassar take the largest tankers and add one to three days of steaming, which RSIS costs at roughly US$472,000 per voyage; Sunda is shallow and current swept. China's Kyaukphyu to Kunming pipeline bypasses the strait but moves at most 440,000 b/d, and Thailand shelved its Land Bridge in July 2026.

Why is the Strait of Malacca so important to China? Because roughly 75% of Chinese seaborne crude imports pass through it, per Vortexa, and China took 48% of all import volumes crossing the strait in the first half of 2025. Beijing has called this the Malacca dilemma since 2003 and answered with pipelines through Myanmar and Central Asia, a stockpile of about 1,492 million barrels at mid-2026, and naval investment. None of those substitute for the passage.

How many ships pass through the Strait of Malacca each year? 102,525 vessels over 300 gross tonnes transited in 2025, according to Malaysia's Marine Department, up 8.7% from 94,301 in 2024 and the first year above 100,000. That averages about 281 a day. Container ships are the largest category, followed by tankers and dry bulk carriers.

Is piracy still a problem in the Strait of Malacca? It is a nuisance rather than a threat to trade. ReCAAP recorded 108 incidents in 2025, the highest since 2007, but 107 were in the Singapore Strait, most were opportunistic night time theft by unarmed perpetrators, and none reached the most serious severity category. Indonesian arrests in July and August 2025 cut the rate from 13 incidents a month to under three.