Malacca Strait spillover: How Hormuz turmoil is putting Asia’s busiest shipping route under pressure

The Strait of Malacca, one of the busiest shipping routes in the world, is seeing more vessels pass through as ships avoid disruptions in the Red Sea and the Strait of Hormuz. While the extra traffic is putting pressure on ports and cargo movement, Malaysian shipping officials say the system is still coping well. 

More ships are being diverted to the Malacca Strait 

The Malaysia Shipowners’ Association (Masa) said the impact of the crises in the Red Sea and the Strait of Hormuz is becoming more and more visible. Association president Mohamed Safwan Othman said ships changing their routes are adding pressure on ports and cargo handling along the Strait of Malacca. However, he said Malaysian ports have so far managed the congestion effectively.

“The spillover effect must be taken into account as vessels are forced to change course. This will cause congestion at ports, which must be handled by port operators to ensure cargo movement is not disrupted,” Safwan said, according to The Sun.

The Strait of Malacca lies between Malaysia, Indonesia and Singapore and is one of the world’s most important sea routes. It carries nearly a quarter of global maritime trade every year and is home to major ports such as Port Klang and the Port of Tanjung Pelepas. 

Around $7 trillion worth of trade passes through the strait annually. It is also the shortest and fastest shipping route linking countries such as China, Japan and South Korea with markets in India, Africa and Europe. 

Safwan said another reason the route has remained reliable is the close cooperation between Malaysia, Indonesia and Singapore. The three countries work together on navigation safety, environmental protection and oil spill response, helping keep ships moving even as other regions face instability. 

Why is the Strait of Hormuz affecting Malacca? 

The pressure on the Malacca Strait began after the 2026 Iran war. The conflict broke out after US and Israeli strikes on Iran in late February. In response, Iran effectively closed the Strait of Hormuz.

At the height of the crisis, tanker traffic through Hormuz dropped dramatically. The waterway normally sees about 84 tanker crossings every day, but traffic dropped to only a small number of ships. A US-brokered memorandum of understanding signed in mid-June was meant to end the fighting and reopen the strait. 

However, the situation has remained unstable. Iran briefly shut the route again after fresh Israeli strikes on Lebanon. By early July, shipping monitors said the Strait of Hormuz had only partially reopened. Ships were travelling in escorted convoys, traffic remained well below normal levels, and hundreds of vessels were still waiting near Gulf ports for conditions to improve.

Although the Strait of Malacca is nearly 4,000 kilometres away from Hormuz, the two waterways are closely linked through global trade. 

Before the conflict, more than 23 million barrels of oil passed through the Malacca Strait every day during the first half of 2025, according to US Energy Information Administration data reported by Reuters. That was even higher than the roughly 21 million barrels moving daily through Hormuz.

More than 102,500 ships used the Malacca Strait last year alone. When traffic slows in Hormuz, many ships are forced to look for safer or alternative routes. That increases pressure on nearby shipping lanes such as the Malacca Strait.

Oil prices surged before easing 

Brent crude rose by about 10% to 13%, reaching around $80 to $82 a barrel shortly after the war began. By the end of March, prices had climbed roughly 65%, marking the biggest monthly increase on record.

In April, the World Bank estimated Brent crude could average between $95 and $115 a barrel during 2026 if disruptions continued. Since then, prices have eased as diplomatic efforts have reduced tensions.

By late June, Brent crude had fallen back to around $73 to $75 a barrel and briefly returned to pre-war levels near $72. However, prices rose again after fresh attacks on ships.

In recent days, Brent has been trading in the low $70s as markets remain hopeful that shipping through Hormuz will continue to improve, even though traffic has not yet fully returned to normal.

However, Safwan believes the impact goes beyond fuel prices. He said higher oil prices have increased voyage costs, which are usually paid by charterers. Shipping companies are also facing higher operating costs because insurance, repairs, maintenance and onboard supplies have all become more expensive.

For Southeast Asia, the biggest issue has not been fuel shortages but increased shipping traffic. More oil tankers and cargo ships are choosing routes through or near the Strait of Malacca because they are seen as safer and more reliable.

The Malaysia Shipowners’ Association believes Malaysia’s ports have handled the additional shipping well, thanks largely to the close cooperation between Malaysia, Indonesia and Singapore. However, uncertainty around the Strait of Hormuz remains.