KUALA LUMPUR, June 23 (Bernama) -- The Middle East crisis is not ending; it is now just changing its shape. At present, what we are seeing is no longer a simple, temporary disruption, as analysts still expect, but a clear, structural reset across energy, freight, insurance, and logistics. Even if a fragile political arrangement lowers immediate tensions, Hormuz, the Red Sea, Bab el-Mandeb, and the East Med are going to be regarded and priced as risk-priced corridors for years, not weeks. Reuters already notes that the latest U.S.-Iran arrangement offers relief but, without any doubt, leaves core disputes unresolved, while the Strait of Hormuz flows are unlikely to return as quickly as some expect at present to pre-war levels. Taking the Red Sea example, the latter is still only at 60% of the level of shipping before Houthi actions, after a three-year “reopening”.
The key outcomes are clear. The first is partial de-escalation: prices soften, some tankers return, but what is much more important is that insurers, banks and charterers will continue to price political risk into every voyage. The second is renewed escalation: one missile, mine, boarding incident or Houthi miscalculation will be enough to push Red Sea and Gulf shipping again back into crisis, with most probably the same debilitating results. The third, and most likely, is managed instability, which means a situation not of full war, not of total peace, but of permanent friction for shipping, trade, and oil and gas markets, which is the most dangerous scenario because markets become numb while costs keep rising.
Institutions cannot “solve” this with statements; they all need redundancy. Governments, banks, insurers, ports and energy companies will have to treat maritime security as balance-sheet protection. The latter is very important, as this means diversified routing, strategic storage, pre-arranged insurance pools, state-backed guarantees, better convoy coordination, cybersecurity readiness and real-time risk intelligence. The result of the Hormuz (and Red Sea, or even the Baltic) crisis is the realisation that waiting for naval protection after a crisis starts is no longer a strategy on which to build your future.
“Having spent years setting up, advising and supporting trade operations across the GCC and Southeast Asia, including engagements with national banks, financial institutions, commodity traders, logistics operators and energy companies, I have seen firsthand how quickly geopolitical risk translates into commercial reality. Long before cargoes stop moving, banks begin adjusting credit lines, insurers tighten conditions, and trading houses alter routing decisions. The real impact of a crisis is often first visible in financing structures and trade flows rather than on shipping screens. Today’s Middle East crisis is following exactly that pattern,” said Dr. Cyril Widdershoven.
Middle Eastern and Arab NOCs understand this faster than many Western institutions. Aramco, ADNOC, QatarEnergy, KPC and others are no longer only selling molecules; they are securing corridors, terminals, fleets, storage, trading arms and downstream positions close to Asian demand. Asia is no longer a market; it has become the main anchor for the future. The shift is from FOB exports to integrated control. The latter means that there is a big push to bundle crude, LNG, petrochemicals, bunkering, refining, storage, and shipping into a single strategic chain. The latter issues and realisation are the main drivers behind Gulf players deepening their exposure to India, China, Southeast Asia, and flexible LNG networks. Aramco’s Jafurah monetisation and international LNG expansion through MidOcean are part of this wider infrastructure-as-strategy model.
Sanctions are accelerating this. Western sanctions and compliance uncertainty slow traditional trade finance and lead to higher costs and more selective strategies. Ships, cargoes, owners, insurers, banks and ports are all now screened as political assets. The consequence is simple: the landed cost of energy rises even when the commodity price does not. War-risk cover for Hormuz has reportedly risen from around 0.25% of vessel value to as high as 3% for some exposed vessels, while Lloyd’s-related high-risk designations have widened across the Gulf.
This changes freight financing not temporarily but permanently. International and regional banks will demand more margin, while insurers will demand exclusions. Charterers will demand optionality. Importers will pay for rerouting, delay, demurrage, storage and credit risk. For import-dependent economies, especially in Asia, Africa and parts of Europe, the latter means that for all the energy bill will increasingly include a hidden security premium. Oil at $85 can behave like $100 when freight, insurance and financing are added.
“My experience working with and advising trade-finance operations in the Gulf and Malaysia has consistently shown that energy trade is ultimately a financing business as much as it is a shipping business. Cargoes only move efficiently when banks, insurers, traders, ports and governments operate within a predictable framework. Once uncertainty enters the equation, liquidity becomes selective, transaction costs rise and risk premiums multiply throughout the supply chain. What is currently happening across Hormuz, the Red Sea and the wider Middle East is therefore not only a maritime-security challenge; it is increasingly a trade-finance challenge that will influence investment decisions, storage strategies and commodity flows for years to come.” Dr. Cyril remarked.
The fragmentation of the energy mix makes this even more important. Hydrocarbons, LNG, biofuels, methanol, ammonia, and future green fuels will not neatly replace one another; they will coexist. At present, there is no real full-scale substitution for hydrocarbons, while energy and product demand are still increasing and will be for decades. That means more terminals, more storage tanks, more safety rules, more specialised vessels, more port-side infrastructure and more regulatory complexity. Energy security will no longer be about a single pipeline or tanker route; it has to be built around and linked to multi-fuel optionality.
ASEAN and Malaysia now sit at the center of this new map. The Strait of Malacca is not just a shipping lane; it is the Asian energy bloodstream. The latter is clear, as even the IEA and the EIA identify Hormuz and Malacca as the world’s most important oil transit chokepoints. The EIA has even stated that Malacca handled an estimated 23.2 million barrels per day in 1H25, which is a staggering 29% of global maritime oil flows.
He continued, “My observation is that ASEAN understands the commercial opportunity, but readiness is uneven. Having worked extensively with trade, energy and logistics stakeholders in Malaysia and across the wider ASEAN region, including advisory engagements involving banking and financial-sector trade operations, I view Malaysia's potential from both a commercial and financial perspective. The country's geographic position along the Strait of Malacca remains one of its greatest strategic advantages. However, future success will depend not only on infrastructure investments, but equally on creating a trusted ecosystem for financing, insurance, customs efficiency, energy trading and international dispute resolution. Infrastructure attracts attention; financial credibility attracts capital. Both will be needed if Malaysia is to capitalise on the structural shift currently underway in global energy and maritime trade.”
There is no doubt that Singapore is the most important asset in the region, widely recognised as world-class. However, it is also currently already fighting an uphill battle, as it is congested and expensive. At the same time, Malaysia has geography, land, political ambition, and room for new energy infrastructure. The main constraints to be dealt with at present are that it still needs to demonstrate execution, governance, security, and investor confidence. Another Asian country, again in the same arena, Indonesia has scale but regulatory complexity. Others, such as Thailand and Vietnam, have industrial demand but less chokepoint leverage. The region is strategically important, but not every player is equally prepared.
That is why new freeport and energy-zone concepts matter. Maharani Freeport will be of interest as it introduces a potential Malaysian energy, logistics, storage and maritime services node directly along the Strait of Malacca. Its own project material describes it as Malaysia’s first duty-exempted energy freeport, within Muar Port limits, with deep-water access exceeding 24 meters and VLCC capability. In other reports, it is stated that it is a 3,200-acre, three-island deep-water free zone designed for oil and gas activity, with energy hub, seaport, industrial park, and financial hub components.
Don’t think that Maharani will replace Singapore. That is the wrong question. The real dynamic is that Singapore may no longer be the only logical answer for storage, blending, bunkering, finance and energy logistics in the Malacca system. If Maharani, Port Klang, PTP, Johor, and other Malaysian assets are coordinated properly, Malaysia could become a complementary yet strategically valuable alternative: cheaper, closer to land-based industrial development, and potentially more flexible for Middle Eastern, Chinese, Indian, and ASEAN energy players.
For Singapore, this means competition as well as validation. Singapore remains the benchmark for reliability, arbitration, bunkering, finance and maritime services. But its premium model becomes vulnerable, especially if international and regional energy companies decide they need redundancy more than prestige. For Malaysia, the opportunity is enormous, but so is the risk. A freeport will need security, transparent rules, bankability, and international trust to succeed; otherwise, it will only be real estate. However, when set up with all factors in mind, especially storage, customs efficiency, financing, bunkering, digital tracking, ship services, and energy trading, it will become a major and highly strategic infrastructure.
The conclusion is blunt: the Middle East crisis has moved the center of gravity eastward. The Gulf is still the source, but Asia is the battleground for access. The Strait of Malacca is no longer just a passage; after Hormuz, it has clearly become the insurance policy for the future energy system. Middle Eastern NOCs, Asian importers, banks and ports that understand this early will build permanent advantage. Those still waiting for the “old normal” to return are already behind.
SOURCE: Blue Water Strategy
FOR MORE INFORMATION, PLEASE CONTACT:
Name: Dr. Cyril Widdershoven
Tel: +316 5381 9265
Email: cyril@bluewaterstrategy.eu
--BERNAMA
