JAKARTA – A proposal by the Indonesian government to impose tolls on vessels traversing the Strait of Malacca has highlighted a volatile shift in global maritime navigation, as the traditional rules-based order governing international waters gives way to political leverage and strategic coercion.
Finance Minister Purbaya Yudhi Sadewa recently suggested charging fees for ships passing through the strategic waterway, citing similar actions taken by Iran in the Strait of Hormuz. Although the Indonesian government subsequently withdrew the suggestion, the incident has caused significant concern among Asian importers and maritime insurers.
For decades, the movement of goods across the oceans was governed by a series of treaties and agreements established between the late 1950s and the 1990s. Anchored in the United Nations Convention on the Law of the Sea (UNCLOS), these frameworks were designed to ensure that international waters remained free and safe for navigation, facilitating a massive expansion in global commerce.
According to the World Trade Organization, these rules supported the growth of global trade from approximately $60 billion in the 1950s to more than $25 trillion last year. Maritime transport currently carries more than 80 percent of all goods traded worldwide.
Experts now warn that this stability is being dismantled by the actions of major global powers, including the United States, China, Russia, and Iran, as coastal states and navies increasingly test how far they can stretch long-standing norms on “innocent passage” and transit rights.
The Hormuz Standoff
The Strait of Hormuz has become a primary flashpoint for the weaponization of maritime transit. In early March, Iran began restricting passage for most vessels following the launch of a war against the country by the United States and Israel, tightening its control over one of the world’s busiest energy chokepoints.
The United States responded on April 13 by imposing a naval blockade on Iranian ports and ships. This escalation has led to several direct confrontations:
- U.S. forces have captured Iranian vessels near the strait.
- U.S. troops have boarded ships in the Asia Pacific region under allegations that they were transporting sanctioned Iranian oil.
- Iranian forces have captured vessels attempting to pass the strait without official permission and have opened fire on several ships.
These actions have contributed to a global energy crisis, pushing oil and gas prices to multiyear highs and forcing energy-importing governments to activate contingency stockpiles, issue emergency guidance to shippers and recalibrate sanctions enforcement.
Jack Kennedy, head of MENA Country Risk at S&P Global Market Intelligence, stated that “even short of a full shutdown, ‘permissioning’ and pressure can impose major costs and uncertainty.”
Kennedy cited a report from the United Kingdom Maritime Trade Operations regarding a container ship northeast of Oman that was fired upon by a gunboat linked to Iran’s Islamic Revolutionary Guard Corps (IRGC). The attack caused significant damage to the ship’s bridge. Kennedy described the event as “a show of a calibrated use of force, signalling control without necessarily aiming to halt all traffic.”
Diplomats in the Gulf note that such calibrated actions complicate collective responses: they fall short of the outright closure that would trigger clear treaty obligations, yet still undermine the principle that key straits should remain open to all commercial shipping in peacetime.
Diplomatic Conflict Over the Panama Canal
Tensions have also extended to the Western Hemisphere, where the United States and several Caribbean and South American nations issued a joint statement accusing China of exercising “targeted economic pressure” against Panama-flagged vessels.
The joint statement alleged that China had detained these ships in its ports, describing the moves as “a blatant attempt to politicise maritime trade and infringe on the sovereignty of the nations of our hemisphere.” The charges put fresh strain on already fraught discussions over how to protect the neutrality of the canal, a principle embedded in the 1977 Torrijos-Carter Treaties that transferred control from Washington to Panama.
China’s Ministry of Foreign Affairs spokesperson, Lin Jian, denied the claims and accused the United States of hypocrisy regarding its own history with the canal.
“Who occupied the Panama Canal for a long time, invaded Panama with its military, and arbitrarily trampled on its sovereignty and dignity? Who covets the Panama Canal, seeks to turn this international waterway – meant to remain permanently neutral – into its own territory, and disregards the sovereignty of regional countries? The answer is self-evident,” Lin Jian said.
This diplomatic dispute follows a decision by Panama’s Supreme Court three months ago to scrap a longstanding concession held by a Hong Kong-linked company for the operation of the Balboa and Cristobal ports. The court’s decision occurred amid sustained pressure from the United States for Panama to limit Chinese influence near the canal, a move Beijing has condemned.
The episode underscores how control over port terminals, pilotage services and flag registries has become part of a wider contest over critical infrastructure policy. Canal authorities and maritime regulators now face pressure not only to keep traffic flowing, but also to demonstrate that operational decisions are insulated from great-power rivalry.
Strategic Shifts in Global Waterways
While routine trade still largely follows existing legal frameworks, analysts say the number of strategic exceptions is increasing. Naval control is increasingly being used to apply economic pressure far beyond immediate conflict zones, testing how flexibly governments can interpret their rights as coastal or flag states under international law.
Key areas of disruption include:
- The Black Sea: Russian restrictions on Ukrainian exports have previously triggered global food supply shocks, forcing multilateral grain initiatives and emergency procurement by import-dependent countries.
- The South China Sea: China has faced accusations of harassing commercial vessels to enforce contested territorial claims, though Beijing denies these reports.
- The Red Sea: Attacks by Houthi rebels have forced shipping companies to divert vessels around the Cape of Good Hope, adding weeks to voyage times between Asia and Europe.
Jean-Paul Rodrigue, professor at the maritime business administration department at Texas A&M University, noted that while maritime pressure is not a new tactic, the current environment is different due to the volume of trade. “What has changed is the scale, the volume of containers, the size of the global fleet,” Rodrigue said.
Policy advisers warn that each local disruption now has outsize global effects, forcing finance ministries, central banks and regulators to factor maritime chokepoints into inflation forecasts, energy security planning and resilience strategies for critical supply chains.
Economic and Operational Fallout
The transition from a rules-based system to one based on political calculation is creating tangible costs for the shipping industry and, ultimately, consumers. Diverted routes increase fuel consumption and time at sea, which raises overall operating expenses and complicates just-in-time logistics for manufacturers and retailers.
Furthermore, insurance premiums and war-risk pricing have risen, and compliance processes have become more stringent. Even brief detentions or inspections can cause cascading delays in cargo commitments, leading operators to change their routing or the flags their vessels fly to avoid politically motivated delays.
Elisabeth Braw, senior fellow with the Atlantic Council’s Scowcroft Center for Strategy and Security, observed that “we have not seen the oceans this turbulent and dangerous” since the establishment of the original maritime rules decades ago.
The erosion of oversight has also benefited non-state actors. A recent report from the International Maritime Bureau confirmed that 2025 saw the highest level of piracy incidents in the last five years, particularly in areas where naval resources have been reassigned to higher-profile standoffs.
Kennedy of S&P Global warned that the primary danger is the creation of a new global standard. “The risk is the precedent that could be set once multiple states test boundaries – through de facto permissioning, selective enforcement, or threatening tolls or levies in international straits. Then outcomes become more contingent on bargaining and power.”
For governments, shipping executives and insurers, the Indonesian debate over Malacca tolls is therefore more than a domestic fiscal idea. It has become a test of whether established legal norms – from UNCLOS to canal treaties – can still constrain states that see control over narrow seas not just as a security asset, but as an instrument of economic statecraft.
