Businesses Pay Up to $4 Million for Panama Canal Slots Amid Strait of Hormuz Disruptions

Shipping companies have paid as much as $4 million to pass through the Panama Canal amid disruptions in the Strait of Hormuz, according to the Panama Canal Authority. Normally, vessels pay a flat rate for reserved slots, but those without reservations can bid in auctions for available slots instead of waiting offshore.

In recent weeks, auction prices have increased due to heightened demand as ships reroute to avoid the Strait of Hormuz, where tensions between Iran and the United States have restricted passage. Companies are shifting purchases to other countries and opting for the Panama route, which they view as safer and more cost-effective under current conditions.

Rodrigo Noriega, a lawyer and analyst in Panama City, stated that companies consider the Panama Canal preferable amid the risks in the Middle East, and that this situation is impacting global supply chains.

The average crossing fee ranges from $300,000 to $400,000 depending on the vessel type. Previously, additional fees for expedited slots were between $250,000 and $300,000, but recent averages have risen to about $425,000. Ricaurte Vásquez, the canal's administrator, reported that one unnamed company paid an extra $4 million for a fuel vessel redirected to Singapore due to geopolitical tensions, as Singapore faced fuel shortages.

Other oil companies have paid over $3 million in additional fees to speed up their passages amid rising oil prices. Vásquez noted that while ships have not accumulated at the canal, the higher costs stem from urgent last-minute changes. He added that companies determine the bid amounts themselves.

On Wednesday, Panama's foreign ministry stated that Iran had seized a Panama-flagged vessel, the MSC Francesca, operated by an Italian company, in the Strait of Hormuz. The ministry described the action as forcible and said it was unclear if the vessel remained in Iranian custody.

The statement indicated that the seizure affects maritime security and called for the Strait of Hormuz to stay open for international navigation without threats. Panama maintains one of the world's largest ship registries.

Brent crude oil prices briefly exceeded $107 per barrel this week, up from around $66 per barrel a year ago. Noriega stated that if the conflict persists, canal crossing costs could rise further, as oil prices continue to increase. He added that the effects on global trade were not fully anticipated.