They are called “chokepoints,” because all it would take for the energy crisis to emerge is for them to close. The most vital of all is the Strait of Hormuz, between Iran and Oman. Every day, nearly 20m barrels of crude oil pass through it, equivalent to almost 20% of the world’s consumption. Its closure would be enough to send markets reeling.
Then comes the Strait of Malacca, between Malaysia and Indonesia. It is the transit corridor to East Asia, and bears the raw reality of the world’s shift towards the Pacific. It handles more than 15m barrels of oil a day. Ships bound for China, Japan and South Korea sail through it.
The Suez Canal links the Mediterranean to the Gulf, via the Red Sea. Nearly 8m to 9m barrels of oil pass through it every day. Its blockage in 2021 by the container ship Ever Given has served as a reminder of its vulnerability.
Finally, let’s mention the Bab el-Mandeb Strait, between Djibouti and Yemen, which is now at the heart of the news with the pressure exerted by the Houtis of Yemen. It is the key to access to the Suez Canal from the Indian Ocean, and the Bosphorus Strait, between the Black Sea and the Mediterranean, is the gateway for Russian and Kazakh crude oil. All are sensitive points where physical geography and political frictions are closely intertwined.
The Strait of Malacca: the “Chinese curse”
To understand Malacca, you have to turn the map around. Look not from Washington or London, but from Shanghai. It is no longer the Atlantic that structures the movement of goods, but the Pacific. The Strait of Malacca, 2.7km wide at its narrowest point, becomes the nerve centre linking the Indian Ocean to the China Sea. It is through this passage that the vast majority of the oil imported by China transits.
However, this concentration poses a problem for China and it has become common to speak of the “curse of Malacca”: 80% of China's maritime crude imports pass through Malacca.
Malacca is the shortest route between the Persian Gulf and the terminals at Ningbo, Qingdao or Tianjin. Bypass routes (Lombok, Sunda) lengthen journeys and increase costs.
Therefore, the question is not to get out of Malacca, but to strategically complement it.
The land breakaway: China traces its pipelines
China has responded to maritime vulnerability with a land breakaway. Whilst seas can be blocked, land can be linked by pipelines. This is why China has invested heavily in a continental oil supply network in Eurasia.
First route: Russia, via the ESPO (Eastern Siberia Pacific Ocean) pipeline. This links the fields of Eastern Siberia to the Chinese city of Daqing, with a capacity of almost 1.6m barrels a day. The two countries are considering doubling capacity, but this remains at the planning stage for the time being.
Second route: Kazakhstan, via the Atasu-Alashankou pipeline. Although less massive (0.4m to 0.5m barrels per day), it remains essential for diversifying sources of supply. China is also investing in storage capacity along this corridor.
Third route: Burma, via the Kyaukphyu-Kunming pipeline. This ambitious project avoids the Strait of Malacca altogether: the crude oil lands on the west Burmese coast, then crosses the mountains to Yunnan. With a capacity of around 0.4m barrels per day. Political instability in Burma is slowing down its maximum exploitation.
Returning to dry land
The aim of this strategy is to reduce dependence on the sea. China is seeking to bring energy supplies inland, to the mainland. The aim is to guarantee a stable, controllable supply from countries deemed more predictable than the seas.
Energy and the oceans have a complex relationship that shapes the global economy. The oil routes are a perfect illustration of this, and they highlight the key points, today as in the past and as they will be in the future. The Strait of Malacca is to China what Suez was to the United Kingdom and France: a vital dependency, a structural weakness. Faced with this, Beijing is building a strategy in which land routes across Eurasia help to reduce dependence, without erasing the importance of sea routes, which by virtue of the planet’s geography will always have a dominant role.
*Manuel Maleki is a PhD economist with the Edmond de Rothschild Group.
This article was originally published in French.
