Singapore, Malaysia and Indonesia said on Thursday they are stepping up security in the Strait of Malacca, a key shipping lane for world trade, following warnings of possible attacks on oil tankers in the area.

The Singapore Navy has received indications a terror group is planning attacks on oil tankers in the Strait of Malacca, the Singapore Shipping Association said in an advisory. 

 

The Singapore Navy recommended ships using the strait between Indonesia and Malaysia strengthen security measures. Malaysia’s coast guard has already stepped up security in the narrow waterway that tankers use to carry oil from the Middle East to Japan and China. 

 

Indonesia said it is stepping up security there as well, Defence Minister Purnomo Yusgiantoro told Reuters. “We will increase the security and step up patrols in that area. Oil tankers can pass, but we will increase our readiness,” he said. 

 

An attack that closed the Strait of Malacca or the Singapore port even temporarily could have a disproportionate impact on global trade, since Singapore is the world's top container shipping port and biggest ship refuelling hub. 

 

“Maritime attacks offer terrorists an alternate means of causing mass economic destabilisation,” terrorism risk analyst Peter Chalk said in a RAND report on piracy and maritime terrorism. 

 

“Disrupting the mechanics of the global ‘just enough, just in time’ cargo freight trading system could potentially trigger vast and cascading fiscal effects, especially if the operations of a major commercial port were curtailed,” Chalk said. 

     

The Singapore Shipping Association said its warning did not preclude possible attacks on other large vessels besides tankers. 

 

A Thai naval attache in Singapore said the original warning came from Japan, which informed the International Maritime Bureau (IMB) that ships in the Strait could be hijacked. The IMB then warned regional navies of a possible piracy attack, he said. 

 

“Later, they changed the term to “terrorist attack” as there was fear that they could use heavy weapons to attack these ships,” the Thai attache, Captain Sutheepong Kaewtab, said. 

 

IMB spokesman Noel Choong said it had received the information from a foreign government agency. 

 

“It is a terror threat,” Kuala Lumpur-based Choong said when asked whether it was a terror threat or piracy. 

 

The Malacca Strait has long been infested with pirates. 

 

The threat of an attack by either a terror group or pirates could raise insurance costs for shipowners. A shipping broker in Singapore said he had not heard of the warning and said there had been no effect on rates for booking tankers. 

 

Middle East crude accounts for 90% of Japan’s imports, while up to 80% of China’s oil imports and 30% of its iron ore imports pass through the Strait of Malacca.  

 

Any attack could also have a big impact on shipments of some major commodities from Sumatra. The island is a key producer for palm oil, rubber and coffee. 

 

But a spokeswoman for Japan’s Mitsui O.S.K. Lines Ltd (9104.T), the country’s second-biggest shipping firm, said the warning would not cause it to change operations. “I don't think we would change the route. Basically the area is dangerous, so we have been taking precautions.”