Panama Canal tolls rise due to Iran war

The cost of transiting the busiest shipping lanes through the Panama Canal has hit a record high as Asian oil and gas buyers re-route global logistics routes disrupted by the Iran war, the Financial Times reported.

Daily auctions for passage through the canal are now attracting five times more bids than before the conflict. The average price for passage through the most heavily used Panamax locks is around $837,500.

Analysts say about 70% of ships use Panamax locks, and prices have risen nearly tenfold since the war began, reflecting Asian buyers’ rush to source oil, fuel and raw materials, including coal, mainly from the US Gulf Coast.

The surge in US oil exports through the canal, the shortest route to Asia, has pushed waiting times for tankers to 4.25 days, a six-week high. That has led some companies to pay millions of dollars to skip the queues, with some auctions reaching $4 million in April. Large shipowners usually book their passages in advance at lower rates, but up to 30 percent of traffic is forced to compete in daily auctions.

The Panama Canal Authority has said the record prices are the result of market changes, not rate increases, and that the canal has continued to operate steadily despite global instability.

Experts say the availability of US energy resources is playing a key role. With supply shortages on the market, it is demand from Asia that is pushing up prices.

At the same time, competition for US energy resources between Europe and Asia has increased significantly. While many ships bypass Africa via the Cape of Good Hope, shipping through the Panama Canal remains more profitable.

Since the war began in late February, at least 29 tankers carrying diesel, liquefied natural gas and jet fuel have changed routes. Most of them are headed to Asia. Analysts also note an increase in the redirection of supplies from the Atlantic basin to Asian markets, where prices have become higher than in Europe.

Tags: Panama Canal