JAKARTA – One perspective on global geo-economic politics is now opening up, namely the reality that the world has failed to maintain stability in the Strait of Hormuz due to the Iran-Israel conflict. This reality should be a serious consideration for Indonesia.
For too long, Indonesia has viewed the Malacca Strait, the Sunda Strait, and the Lombok Strait merely as ordinary shipping lanes, whereas amid increasing geopolitical uncertainty, these straits could become an extraordinarily large source of national economic strength.
When the Strait of Hormuz is disrupted, around 20–25 percent of global oil trade and about 20 percent of global LNG trade are also affected. This narrow route transports around 20 million barrels of oil per day, meaning even small disruptions immediately trigger spikes in energy prices, logistics costs, and global inflation.
For Indonesia, the impact is very real because part of national oil imports is still linked to this route. In fact, the government has begun shifting some oil imports to the United States to avoid distribution disruptions from the Middle East.
However, behind this threat, there is actually a major opportunity that Indonesia has not yet fully utilized. If the Strait of Hormuz is disrupted, most of the world’s tanker and logistics flows will seek safer alternative routes.
In the Asian context, the Malacca Strait becomes the most logical choice because it is one of the busiest shipping lanes in the world, with around 60,000–90,000 vessels passing each year, and some recent estimates suggest the figure may reach around 85,000 vessels annually.
Unfortunately, so far Indonesia has mostly acted as a “spectator” in this maritime economic flow. Foreign vessels merely pass through, producing pollution, increasing risks of collision and oil spills, while the economic contribution to Indonesia remains very small. Most of the profits are instead enjoyed by ports and logistics hubs in other countries such as Singapore.
This is where the concept of a “strait economy” becomes important. Indonesia does not need to violate international maritime law by imposing mandatory fees on passing vessels. Instead, Indonesia can develop various voluntary, high value-added services. For example, ship bunkering (fast refueling), emergency ship maintenance, logistics services, warehousing centers, pilotage services, digital Vessel Traffic Service (VTS), evacuation services, as well as environmental services such as oil spill response and ship waste management.
This concept is not new. Turkey has successfully utilized its strategic position in the Bosporus Strait by developing various high-value maritime services amid rising geopolitical tensions. Indonesia can adopt a similar model, but at a much larger scale because the Malacca Strait has higher global trade volume. If managed seriously, the additional economic value during global disruptions could reach billions of US dollars from added maritime services alone.
Indonesia must also be careful not to take the wrong approach. Iran’s threat to close the Strait of Hormuz shows how choke points can be used as political and economic bargaining tools. However, Indonesia cannot simply replicate this model because the Malacca Strait is subject to an international transit regime under the law of the sea. Any attempt at mandatory levies or unilateral restrictions would risk diplomatic conflict and accusations of violating freedom of navigation.
Therefore, the most realistic strategy is to strengthen the implementation of Article 43 of UNCLOS through trilateral cooperation between Indonesia, Malaysia, and Singapore. This article allows coastal states and user states to cooperate in financing navigational safety, environmental protection, and maritime risk management.
The Malacca Strait has in fact become a clear example of Article 43 implementation through the Cooperative Mechanism established since 2007. This means Indonesia has a strong legal basis to request participation from user countries such as China, Japan, South Korea, India, the European Union, and Gulf countries in financing navigation systems, maritime radar, digital surveillance, maritime security, and environmental protection in the Malacca Strait.
In other words, the world shares the cost because it also enjoys the benefits. In addition, developing a strait economy can also become part of Indonesia’s national blue economy strategy. Investment in ports, shipyards, maritime supply industries, logistics zones, and shipping services will create tens of thousands of new jobs, especially in coastal regions of Sumatra, the Riau Islands, Batam, Dumai, Belawan, and Natuna.
Indonesia would not only gain revenue from passing ships, but also build a deeper and more sustainable maritime industrial chain.
The disruption of the Strait of Hormuz ultimately shows one important thing: countries that control maritime choke points have far greater economic and geopolitical bargaining power than countries that only act as markets.
Indonesia already possesses that geographic asset, but has not yet fully developed the vision to turn it into real economic strength.
If the Strait of Hormuz is a symbol of how conflict can damage the global economy, then the Malacca Strait should be a symbol of how Indonesia can build its economic future.
