The Strait of Malacca, located between Indonesia, Malaysia and Singapore, links the Indian Ocean to the South China Sea and Pacific Ocean. Malacca is the shortest sea route between Persian Gulf suppliers and the Asian markets – notably China, Japan, South Korea and the Pacific Rim. Oil shipments through the Strait of Malacca supply China and Indonesia, two of the world’s fastest growing economies. It is the key chokepoint in Asia with an estimated 15.2 million bbl/d flow in 2011, compared to 13.8 million bbl/d in 2007. Crude oil makes up about 90 percent of flows, with the remainder being petroleum products.
At its narrowest point in the Phillips Channel of the Singapore Strait, Malacca is only 1.7 miles wide creating a natural bottleneck, as well as potential for collisions, grounding, or oil spills. According to the International Maritime Bureau’s Piracy Reporting Centre, piracy (including attempted theft and hijacking) is a constant threat to tankers in the Strait of Malacca, although the number of attacks has dropped due to the increased patrols by the littoral states’ authorities since July 2005.
Over 60.000 vessels transit the Strait of Malacca per year. If the strait were blocked, nearly half of world’s fleet would be required to reroute around the Indonesian archipelago through Lombok Strait, located between the islands of Bali and Lombok, or the Sunda Strait, located between Java and Sumatra.
There have been several proposals to build bypass options and reduce tanker traffic through the Strait of Malacca, but most have not been followed through. China is on schedule to complete the Myanmar-China Oil and Gas Pipeline in 2013, two parallel oil and gas pipelines that stretch from Myanmar’s ports in the Bay of Bengal to the Yunnan province of China. The oil pipeline will be an alternative transport route for crude oil imports from the Middle East to potentially bypass the Strait of Malacca. The oil pipeline capacity is expected to reach about 440,000 bbl/d.