The term “chokepoint” is getting more exposure with so much focus on the Straits of Hormuz, which is now (mostly) shut to international shipping, pushing up oil and gas prices and stoking fears of inflation and economic damage. There are other important conduits of trade and one of them is the Strait of Malacca. The 900-kilometer strait, bound by Indonesia, Thailand, Malaysia and Singapore, connects the Indian Ocean with the Pacific. Based on certain estimates, around one-fifth of global maritime trade moves through this corridor. (This news service has, separately, reflected on the language of “corridors” in wealth management.)
With tariffs ratcheting, geopolitical tensions and other challenges, wealth managers need to pay attention to these chokepoints. A book published in 2025, Chokepoints: How Economic Warfare is Changing the World, by Edward Fishman, explored the topic. This is an issue that has prompted soul-searching (and spending) on naval power, as well as calls for more awareness of the issue. More than a century ago, Alfred Thayer Mahan, a major thinker on naval warfare, strategy, and international politics, raised the importance of sea power, shaping the maritime strategy of the US and other countries for decades. The rise of globalisation and the security of the high seas are intertwined.
In the following article, we carry this analysis from Paul Cuthbert-Brown (pictured below), WealthBriefingAsia’s contributing editor. Based in Singapore, Paul is close to the action. (He has already reflected on how the wealth management sector can think of supply chain issues.)
The article also demonstrates that geopolitics is no longer an optional topic, but a central consideration for relationship managers, bankers, family office professionals, and other advisors to high net worth and UHNW individuals. We hope readers find this analysis, and the questions that Paul poses for the reader, useful. To comment, email the editor at tom.burroughes@wealthbriefing.com
Paul Cuthbert-Brown
Two analytical frameworks circulating in strategic circles converge making the same uncomfortable conclusion. For wealth managers with exposure to Asia, energy or defence supply chains, that convergence is not theoretical. It is directly investable risk.
The Malacca argument is by now familiar to WealthBriefingAsia readers. Roughly 80 per cent of the PRC’s crude imports transit a strait bordered by Indonesia, Malaysia and Singapore. Washington’s new Major Defense Cooperation Partnership with Jakarta, whatever Indonesia’s carefully maintained non-alignment posture, shifts the operational environment around that chokepoint in ways PRC that planners cannot ignore. The US is tightening its grip on the sea lanes through which PRC economic life must flow. Mahan’s logic, articulated more than a century ago, maps onto contemporary energy geopolitics with uncomfortable precision.
The Hormuz dimension adds a recursive complexity the simpler Mahanian picture does not capture. A blockade of the Persian Gulf’s exit passage is not a surgical instrument directed at a single adversary. It is a systemic shock that propagates through every energy-dependent economy, including the initiating coalition’s own partners. Iran, hardened by four decades of sanctions into an autarkic resistance economy, proves far more resilient than the tightly coupled supply chains of East Asia. The Philippines, a formal American treaty ally running on 98 per cent imported oil, is driven by Washington’s own coercive instrument deeper into Beijing’s economic orbit, precisely the outcome the broader Indo-Pacific strategy is designed to prevent.
This is what analyst Alan Koch terms MADisruption: the structural tendency of chokepoint coercion to propagate damage back through the initiating power’s own alliance and supply networks. The risk does not resolve cleanly in favour of any party and cannot be hedged as a simple geopolitical event with an identifiable winner.
The replenishment dimension sharpens this for investors with defence or aerospace exposure. Advanced munitions and fifth generation strike aircraft depend on rare earth elements and tungsten. The PRC controls over 90 per cent of global rare earth refining capacity and about 80 per cent of tungsten supply. Western strategic stockpiles are measured in weeks to months. Operational tempo becomes contingent on the tacit forbearance of the adversary that the strategy is designed to contain. Defence primes whose valuations assume uninterrupted procurement cycles carry that dependency implicitly in their books.
The acute disruptions at Hormuz and Malacca are expressions of a chronic condition: a deglobalisation trend stagnant or reversing since 2008, reinforced by Covid and now accelerating under tariffs, sanctions and active chokepoint contestation. Beijing has pursued mitigation through overland diversification – pipelines from Central Asia and Russia, the China-Pakistan Economic Corridor, and a string of port investments from Gwadar to Djibouti – but the volumes moved by these routes remain marginal against the tanker traffic that still clears Southeast Asian straits. The dilemma has been managed at the edges, not resolved at its core. Portfolio frameworks calibrated for expanding complexity must now be recalibrated for a system in which complexity is contracting.
The wealth manager’s map of Indo-Pacific risk has historically been drawn around equity volatility, currency exposure and sovereign credit spreads. The chokepoint dimension requires different cartography - one tracing material flows, supply chain dependencies and alliance replenishment constraints to portfolio implications that are less directional and more recursive than conventional frameworks allow. Mahan understood that the power commanding the sea sets the terms for everyone else. The sobering corollary for the current conjuncture is that disrupting those terms extracts costs from the disruptor that initial superiority cannot fully absorb.
Practitioner checklist
Chokepoint risk and portfolio exposure
Questions wealth managers & private bankers should be asking now:
-- What proportion of client portfolios carries direct or indirect exposure to Southeast Asian sovereign debt, and how has Malacca disruption risk been stress-tested against those positions?
-- Do energy logistics holdings – shipping, tanker operators, port infrastructure, marine insurance and reinsurance – reflect a scenario in which multiple chokepoints face simultaneous pressure rather than isolated incidents?
-- Are defence-industrial and aerospace allocations priced for supply chain continuity, and has rare earth and tungsten dependency been modelled as a constraint on operational and therefore commercial performance?
-- Which equity positions in manufacturing, semiconductors or consumer goods carry embedded just-in-time supply chain assumptions that a sustained chokepoint disruption would invalidate?
-- Has deglobalisation been treated as a structural regime shift in asset allocation, or merely as a cyclical headwind, and does that distinction materially alter duration, geography and sector weighting?
-- Where does currency exposure sit relative to a scenario of sustained regional energy stress driving East Asian current account deterioration?
-- Are alternative energy infrastructure investments – LNG terminals, pipeline capacity, domestic refining – being evaluated as strategic hedges rather than purely on standalone return metrics?
-- What is the client’s effective exposure to dollar-denominated assets in a scenario where the Western alliance’s own industrial base faces replenishment constraints and supply chain disruption?
Has geopolitical scenario planning moved beyond binary risk-on or risk-off framing to account for recursive disruption – outcomes that are damaging across all parties simultaneously rather than directionally adverse to one side?