The Peter Zeihan Podcast Series - The Collapse of the World's Strategic Straits || Peter Zeihan

Episode Date: August 24, 2026

The Strait of Hormuz needs a new model for running things, but copy/pasting the voluntary system used in the Strait of Malacca isn't going to work. Join the Patreon here: https://www.patreon.com/PeterZeihan Full Newsletter: https://bit.ly/4zpkuaf

Hey, everybody. Peter Zine here coming to you from Colorado's front range. We found a gap in the wind. So we're taking a question from the Patreon crowd. Specifically, there is a lot of talk from all corners, true, about what to do about the Strait of Hormuz. True. What about replicating what has happened in the Strait of Malacca these last 30 years? Is that a model because it's one that's being discussed? Great question.

The short answer is no. Let's talk about what the Iranians are after. and then go into the Malacca model. So what the Iranians are trying to get is any sort of even tangential acceptance by the United States that they should be able to regulate the Strait of Hormuz as they see fit, and that includes charging tolls or service fees or whatever. The numbers vary wildly from the equivalent of 10 cents a barrel to $2 a barrel for the equivalent cargo, so like a super tanker that comes through with a million barrels, that could be anywhere from

$100,000 to $2 million per passage. And the Iranians think they should be able to say whenever a ship comes or goes, that they have the ability to say you either can't come or here's the toll you have to pay before you can proceed. And in many ways, they've already set something like that up on their side of the Gulf that has been obeyed Iran. radically, I might add. Sometimes they shoot at them, even if they've paid the toll. But overall, their ability to strike across the entirety of the strait means that people have to take these threats seriously.

And it's very rare now that we have 10% of the cargo going through that used to go through back in January before the war started. So their threshold is pretty high. And they're demonstrating that if they don't get their way, they can impose it a cost on anyone. who defies them, including the U.S. Navy. Let's talk Malacca. Now, Balacca, obviously, an international waterway,

busiest waterway in the world, significantly more so than Hormuz, because most of the stuff that comes through Hormuz, ultimately goes through Malacca, in addition to cargo going between the manufacturing countries of Northeast Asia and the consumer economies of Europe. Now, Malacca has a voluntary system that was set up roughly 30 years ago,

where countries and governments and bureaus of those governments can voluntarily contribute some cash to maintain safety procedures in the waterway. Sometimes it's aids to navigation, things like buoys, sometimes it's satellite navigation assistance, sometimes it's search and rescue, and sometimes if, and God forbid there's a collision, it's port facilities to help with recovery and repair.

The thing is, two things. Number one, voluntary. And so a lot of countries, a lot of companies just don't do anything. And number two, because it's voluntary, what gets donated is chump change. In the 30 years that this structure has been in place, the grand total of all fees paid, or voluntarily paid, is under $50 million. And from the Iranian point of view, that should be in the vicinity of the income they get every one to three days. So not a good model. Not saying there is a good model. The question really is a different one, I would argue. We are clearly in a position where the world's, the strongest naval power in human history, the United States, is unable to force a country that doesn't even have a hole in the water from making what needs to be a busy waterway non-functional.

And in that sort of scenario, it's honestly just a matter. of time before the rest of the world grudgingly, and maybe looking the other way, accepts that fact. And when that happens, we will have taken one of the world's great international waterways, Hormuz, and turn it into some sort of tolled system. And when that happens, we will have formally or informally broken with over a century of international maritime law that makes specific waterways open for all for free. Because once Hormally, we'll have, Hormose falls, we have to revisit that issue with every other waterway that is like Hormuz. That's a better question.

We're going to tackle that one tomorrow.