Hormuz blockades test foundational principle of global commerce

Few features of the global economy illustrate interdependence as clearly as maritime chokepoints. Iran’s closure of the Strait of Hormuz has offered a stark demonstration of the risks that such narrow waterways pose to international trade. It also stirred talk of monetising these vulnerabilities, of turning chokepoints into instruments of financial leverage, by, for instance, levying transit tolls. Indonesian finance minister Purbaya Yudhi Sadewa this week publicly pondered about ways states might charge ships passing through the Strait of Malacca, another large chokepoint. He subsequently noted the impracticality of such a move, and officials in Indonesia, Malaysia and Singapore were quick to reaffirm their commitment to keeping the waterway open. That such a toll is even being mused about raises questions about the foundational principle on which global commerce rests: That the seas, beyond narrow territorial limits, are open to all, codified in international law with the United Nations Convention on the Law of the Sea (UNCLOS).

One of the most consequential rights in the UNCLOS is that of transit passage, or the guarantee of freedom of navigation through international straits. This principle underpins the modern maritime order, legally affirming, for example, that Iran cannot close the Strait of Hormuz (Tehran says otherwise because it is not binding), and that, hypothetically, Southeast Asian states (which have ratified UNCLOS) cannot impose tolls on the Strait of Malacca. Yet, with the onset of war, law has given way to power. Prior to the US-Israeli attack on Iran, even during the Iran-Iraq War or the 12-Day War last year, Iran had stopped short of a closure. But, faced with what it perceives as an existential threat, it has resorted to this option — the Strait of Hormuz is a strategic lever for Tehran. Any further escalation with the US is likely to harden its assertion of its rights over the Strait.

Much of India’s trade, and the world’s, flows through a handful of critical maritime chokepoints — the Strait of Hormuz, the Strait of Malacca, the Suez Canal, and the Bab al-Mandab. New Delhi should, therefore, take the lead in reinforcing the law of the sea, ensuring the free and safe passage of vessels in international waters, and working with like-minded partners to prevent these chokepoints from becoming instruments of coercion.