Fees for transiting the Panama Canal have risen to record levels due to the war in the Middle East
The cost of using the Panama Canal’s shipping routes has surged to record levels amid increased demand from Asian companies and the restructuring of global logistics due to the war in Iran.
This is reported by the Financial Times.
Daily auctions for the right to transit the canal are now seeing five times more bids than before the conflict began. The average price for transit through Panamax-class locks has reached approximately $837,500.
“About 70% of ships passing through the Panama Canal use Panamax locks. Consequently, auction prices for these locks have risen nearly tenfold since the start of the war with Iran and the closure of the Strait of Hormuz. This is a very significant increase, reflecting how Asian buyers are trying to source oil, fuel, and dry bulk cargoes, such as coal, primarily from the U.S. Gulf Coast,” noted Ross Griffith, head of pricing at Argus.
The increase in U.S. oil and fuel shipments through the canal—the shortest route between the Gulf of Mexico and Asia—has led to longer waiting times for tankers, up to four days, the longest in the past six weeks.
This is forcing companies to pay significant sums to avoid the queues. In April, individual auctions for passage through the largest locks reached $4 million.
Major shipping operators, particularly container carriers and liquefied natural gas (LNG) transport companies, typically book passage in advance at fixed rates that are significantly lower than auction prices.
At the same time, up to 30% of ships are forced to compete for transit through daily auctions, which causes a sharp increase in the cost of passing through the canal.
The Islamic Revolutionary Guard Corps announced the blockade of the Strait of Hormuz and the designation of violating vessels as military targets. Tehran explains this decision by the United States’ failure to comply with the terms of the ceasefire and the continuation of the naval blockade of Iranian ports.
Iran has again restricted ship traffic through the Strait of Hormuz following the conflict with the U.S. Tehran claims this is a response to Washington’s actions.
Trump stated that the U.S. wants to obtain Iranian uranium by any means necessary.
