The Strait of Hormuz, the Indian Ocean, and the Freedom of Navigation


by Sanjay Pulipaka*
If Iran continues to levy tolls on every ship that traverses the Strait of Hormuz, it raises the question of whether countries in the IOR, which are adjacent to narrow sea routes, should also reciprocate by levying a similar fee on all ships calling at Iranian ports. While the IOR countries have not formally articulated such a policy, Iran’s tactics have sparked considerable discussion about freedom of navigation.
In the past two months, the Strait of Hormuz has become an important site of contestation between the United States (US) and Iran. A few days ago, US President Trump launched ‘Project Freedom’ to open the Strait of Hormuz, then paused it, citing progress on a possible peace deal.
Earlier, Tehran articulated a three-stage negotiation proposal to end the 2026 Iran War. The proposal reportedly stipulated that the US and Israel should provide guarantees not to start the war. The negotiations would then proceed to discuss the opening of the Strait of Hormuz and Tehran’s subsequent control and management of the Strait. Once these two stages are successful, Iran will discuss its nuclear programme. Not surprisingly, the proposal did not receive a favourable reception in Washington, D.C.
An unintended consequence of the war has been a growing view in Tehran that it can benefit financially from controlling traffic in the Strait of Hormuz. President Trump briefly toyed with the possibility of the US levying tolls on ships transiting the Strait, a position which he subsequently abjured. The closure of the Strait and the attempts to levy a fee on traffic through a natural strait (not a man-made canal) have raised concerns among many countries in the Indian Ocean Region (IOR) and Southeast Asia.
The Indian Ocean Region (IOR) comprises approximately 33 nations, 2.9 billion people, and handles 42 per cent of global crude oil and 30 per cent of global containerised cargo transits. For India, 95 per cent of its trade by volume and about 70 per cent by value transits through the IOR. Like the Strait of Hormuz, numerous other narrow sea routes, such as Bab el-Mandeb, the Strait of Malacca, the Sunda Strait, and the Lombok Strait, define the movement of goods in the IOR.
If Iran continues to levy tolls on every ship that traverses the Strait of Hormuz, it raises the question of whether countries in the IOR, which are adjacent to narrow sea routes, should also reciprocate by levying a similar fee on all ships calling at Iranian ports. While none of the IOR countries have formally articulated such a policy, Iran’s tactics have sparked considerable discussion about freedom of navigation.
On April 07, Singapore’s Minister for Foreign Affairs, Vivian Balakrishnan, noted that the Strait of Hormuz at its narrowest point is about 21 miles wide, and the Strait of Malacca and Singapore at its narrowest is about 2 miles wide. Vivian Balakrishnan, sagaciously, refrained from even contemplating the possibility of Singapore levying a fee on ships transiting through the straits adjacent to it. Instead, he called for rigorous adherence to Article 44 of UNCLOS, which makes it obligatory for states bordering narrow sea routes to ensure that there is no ‘suspension of transit passage.’ Furthermore, Vivian Balakrishnan argued that even if countries did not sign or ratify UNCLOS, they would still be obliged by customary international law to respect the right of passage in international straits.
On April 08, Indonesia’s President Prabowo Subianto noted that the Strait of Hormuz determines the fate of many nations, including the price of oil and asked: “do we realise that 70 per cent of East Asia’s energy needs and 70 per cent of its trade pass through the Indonesian straits?” President Subianto did not refer to the imposition of fees on ships transiting the Indonesian straits. On the other hand, Indonesia’s Finance Minister reportedly stated that his country could take inspiration from Iran and collect substantive fees from ships passing through the Strait of Malacca, with the proceeds split among Indonesia, Malaysia, and Singapore. However, the Indonesian foreign minister Sugiono, citing UNCLOS provisions, clarified that Indonesia, as a trading nation, supports freedom of navigation and will not impose tolls at the Strait of Malacca. The Malaysian foreign minister also stated that the countries in the region have a “watertight understanding” on keeping the Strait open.
Taking lessons from the Strait of Hormuz closure, Thailand has revived the plans to build a land bridge connecting the Andaman Sea and the Gulf of Thailand. The land bridge is designed to handle increasing congestion and contingencies such as the unexpected closure of the Strait of Malacca.
The closure of the Strait of Hormuz had a negative economic impact on India, as approximately 30 per cent of crude imports and about 55 per cent of LNG imports transit the Strait. The Prime Minister of India, Narendra Modi, expressed disappointment by stating that the “attacks on commercial ships and the disruption of international waterways like the Strait of Hormuz are unacceptable.” There is growing recognition in India that approximately 60,000 commercial ships transit through or in the vicinity of India’s Andaman and Nicobar (A&N) Islands. Given its dependence on maritime trade and long history of pursuing interests within the framework of international law, India’s infrastructure buildup in the A&N Islands will contribute to freedom of navigation in the region.
The Strait of Hormuz crisis has demonstrated the deep economic interlinkages among the Persian Gulf countries, the IOR countries and other Asian economies. If the IOR countries emulate Iran and levy tolls on ships transiting international straits, it would make international trade costly and generate considerable geopolitical instability. Perhaps it is time for the IOR countries, as India’s External Affairs Minister Dr S Jaishankar noted, to work towards greater collective resilience by building trusted partnerships.
*****
* Sanjay Pulipaka is the Chairperson of the Politeia Research Foundation. He is a former Fulbright Fellow and was a Pavate Fellow at the University of Cambridge. The views expressed here are personal.
References
“Amid Middle East tensions, Malaysia rules out unilateral action in Strait of Malacca,” MalayMail, April 23, 2026, https://www.malaymail.com/news/malaysia/2026/04/23/amid-middle-east-tensions-malaysia-rules-out-unilateral-action-in-strait-of-malacca/217321
“Indonesia will not impose tariffs in the Strait of Malacca: Foreign minister,” CNA, April 23, 2026, https://www.channelnewsasia.com/asia/indonesia-not-impose-tariffs-strait-malacca-foreign-minister-sugiono-6076516
“Indonesia’s finance minister suggests imposing levy on ships transiting Malacca Strait,” CNA, April 22, 2026, https://www.channelnewsasia.com/asia/indonesia-malacca-strait-levy-economic-gain-6073201
“Maritime India: From Vision 2030 to Amrit Kaal 2047,” PIB, October 26, 2025, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2182563®=3&lang=2
“Minister for Foreign Affairs Dr Vivian Balakrishnan’s Oral Reply to Supplementary Question following the Ministerial Statements on the Government’s Response to the Conflict in the Middle East, 7 April 2026.” Press Statements, Ministry for Foreign Affairs, Government of Singapore, April 07, 2026, https://www.mfa.gov.sg/newsroom/press-statements-transcripts-and-photos/minister-for-foreign-affairs-dr-vivian-balakrishnan-s-oral-reply-to-supplementary-question-following-the-ministerial-statements-on-the-government-s-response-to-the-conflict-in-the-middle-east–7-april-2026/
“Prabowo: 70% of East Asia’s Energy Needs and Trade Pass Through Our Seas, This Is How Important Indonesia Is,” Prabowo Subianto, April 09, 2026, https://prabowosubianto.com/prabowo-70-of-east-asias-energy-needs-and-trade-pass-through-our-seas-this-is-how-important-indonesia-is/
“Prime Minister Shri Narendra Modi addresses the Rajya Sabha on the ongoing conflict in West Asia,” PIB, March 02, 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2244438®=3&lang=1
“Remarks by EAM Dr. S. Jaishankar at the 09th Indian Ocean Conference, Mauritius,” Ministry of External Affairs, Government of India, April 11, 2026, https://www.mea.gov.in/Speeches-Statements.htm?dtl/41038/Remarks_by_EAM_Dr_S_Jaishankar_at_the_09th_Indian_Ocean_Conference_Mauritius
“Trump says US could charge for Strait of Hormuz passage amid Iran war,” Al Jazeera, April 06, 2026, https://www.aljazeera.com/news/2026/4/6/trump-says-us-could-charge-for-strait-of-hormuz-passage-amid-iran-war
Aidan Jones, “Hormuz crisis revives Thailand’s land bridge plan but business case still lacking,” South China Morning Post, April 29, 2026, https://www.scmp.com/week-asia/economics/article/3351797/hormuz-crisis-revives-thailands-land-bridge-plan-business-case-still-lacking
Alexander Bolton, “GOP senator: Trump’s proposal to impose US tolls on ships in Strait of Hormuz would be ‘crazy’,” The Hill, April 14, 2026, https://thehill.com/homenews/senate/5830694-tillis-trump-tolls-strait-hormuz/
Bernd Debusmann Jr, James Chater and Kathryn Armstrong, “Trump says US to pause operation to guide vessels through Strait of Hormuz,” BBC, May 06, 2026, https://www.bbc.com/news/articles/clypekl71gdo
Col Neerav Bhatnagar, “The strategic importance of the Andamans: Are we over-stretching ourselves?” The Times of India, March 22, 2023, https://timesofindia.indiatimes.com/readersblog/indiaasiseeit/the-strategic-importance-of-the-andamans-are-we-over-stretching-ourselves-51780/
Darshana M. Baruah, Nitya Labh, Jessica Greely, “Mapping the Indian Ocean Region,” Carnegie Endowment for International Peace, June 15, 2023, https://carnegieendowment.org/research/2023/06/mapping-the-indian-ocean-region
Erica L. Green, Megan Mineiro, Eric Schmitt and Greg Jaffe, “Iran War Live Updates: Trump Again Shifts U.S. Focus on Strait, Pausing Day-Old Escort Mission,” The New York Times, May 06, 2026, https://www.nytimes.com/live/2026/05/05/world/iran-war-trump-hormuz
Summer Said, Benoit Faucon and Alexander Ward, “Iran Offers a New Proposal to End War,” The Wall Street Journal, April 27, 2026, https://www.wsj.com/world/middle-east/iran-offers-a-new-proposal-to-end-war-b88da96c?mod=Searchresults&pos=1&page=1
Talmiz Ahmad, “Indian Ocean: By the numbers,” Frontline, March 07, 2024, https://frontline.thehindu.com/world-affairs/indian-ocean-region-by-the-numbers-vital-hub-for-global-commerce-strategic-chokepoints-vast-oil-reserves/article67891133.ece































