In Panama record prices for access to the canal with Hormuz ‘out of service’

Agile rates for them sea ​​routes busiest of Panama Canal have reached record levels, while the Asian buyersdesperately looking for oil and gascompete for global shipping lanes disrupted by the war with Iran. As revealed by the Financial Times, which cites data collected by Argus Media, daily auctions for transit lanes in the canal attracted five times the number of bids compared to pre-conflict levels, with average prices of $837,500 for the chiuse Panamax most commonly used.

Ross Griffith, Pricing Manager freight transporti for the Americas at Argus, said: “About 70% of ships transiting the Panama Canal use the original Panamax locks, whose auction prices have increased nearly tenfold since the start of the war with Iran and the closure of the Strait of Hormuz“. “This – he adds – is a very significant increase that reflects the rush of Asian buyers to source oil, fuel and bulk raw materials, such as coal, mainly from the Gulf Coast of the United States”.

The times

Increased U.S. oil and fuel shipments through the canal, which is the shortest route between the Gulf Coast and Asiacaused an elongation of the waiting times for oil tankers trying to cross the Panama Canal, reaching 4.25 days, the highest level in six weeks, according to data from research firm Kpler. This has prompted some companies to pay large sums to avoid the long queues that form at the canal’s entrance, with individual auctions for the largest locks reaching $4 million in April.

How auctions work

Large shipowners who frequently use the Panama Canal, such as large container ships and liquefied petroleum gas companies, typically book slots at fixed ratesusually well below average auction pricesrather than competing for slots in daily auctions. However, up to 30% of the channel’s overall traffic can participate in daily auctions rather than booking slots in advance. The Panama Canal Authority told the Financial Times that the results of recent auctions reflect market dynamics and are not the result of a tariff increase.