Strait of Hormuz blockade drives up traffic at Panama Canal

Dubai: The war in the Middle East has boosted demand to move vital cargo through the Panama Canal to such an extent that one vessel carrying liquefied natural gas (LNG) paid $4 million to skip the line and avoid a wait that can take up to five days, according to an official report.

The change follows disruptions linked to conflict involving Iran and the blockade of the Strait of Hormuz, a crucial corridor for a significant share of global oil and gas exports. As a result, some Asian buyers are sourcing energy supplies from the United States and routing shipments through the canal instead of relying on Gulf producers.

Canal traffic has remained steady, averaging between the mid-30s and over 40 vessels per day in recent months. While most ships reserve slots in advance, last-minute auction prices have surged. Previously averaging about $130,000, bids climbed to roughly $385,000 in March and April, with several tankers exceeding $3 million.

Handling about 5 percent of global maritime trade, the canal continues to play a vital role in connecting major markets, particularly between the United States and Asia, amid evolving trade conditions.

Video and inputs: AFP