The Navy’s top commander in the Pacific says he is concerned local arguments in disputed oil-rich waters near the Spratly Islands in the South China Sea could escalate into larger, more serious confrontations.

Adm. Patrick Walsh said Tuesday there is potential for an incident in the South China Sea to intensify much the way tensions between China and Japan spiked in 2010 after ships belonging to the Asian powers collided near the Senkaku or Diaoyu islands, claimed by both nations.

"Quickly the event escalated from something that was local, containable, manageable, to something that became a state-on-state sort of conflict," Walsh said in an interview at his headquarters a few days before he is scheduled to retire and hand over the Pacific Fleet command.

Walsh said the South China Sea — which is heavily traveled by shipping companies, including tankers transporting oil from the Persian Gulf to East Asian nations — is vital to the Asia-Pacific region.

"No matter which perspective you adopt, it’s critically important for security and stability. It is the critical node to all the economic activity. Any interruption there would create a real problem," Walsh said.

Six Asian nations — Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam — claim all or part of the Spratlys, which are believed to be rich in natural resources.

The Philippines and Vietnam have accused Chinese vessels of repeatedly intruding into areas they claim and of trying to sabotage oil explorations in their territorial waters. China has denied the allegations, saying it has sovereignty over the vast sea.

Walsh said the countries have a dilemma in that they risk losing resources if they don’t patrol and enforce their exclusive economic zones yet risk a confrontation if they do.

To compound the situation, he noted countries in the area have a growing interest in obtaining more advanced weaponry.

Walsh recalled the incident two years ago when a Chinese fishing vessel collided with a Japanese coast guard ship on patrol.

Japan arrested the Chinese captain, after which Beijing suspended ministerial-level contacts with Tokyo and postponed talks on the joint development of undersea natural gas fields. China later halted Japan-bound exports of rare-earth metals used in high-tech manufacturing. Several anti-Japanese demonstrations occurred across China.

The captain was later released and sent back to China after heavy pressure from Beijing.

Vice Adm. Cecil Haney is due to succeed Walsh as commander of the Pacific Fleet at a ceremony at Pearl Harbor on Friday.

Walsh, 57, will return to his hometown of Dallas after 34 years in the Navy.