Disruptions in the Strait of Hormuz, one of the main routes for oil and liquefied gas exports in the Middle East, have had significant impacts on maritime transport costs in key locations around the world. Over the past six months, energy cargo traffic through the Panama and Suez Canals has increased, and transport costs have reached new records.
Increase in Costs and Demand for Canal Passages
Due to disruptions in the Strait of Hormuz, global transport costs have sharply increased, and some ship operators are willing to pay between $4 to $5 million in auctions to secure passage through the Panama Canal on specific dates. Currently, transport costs on all global routes have significantly risen due to rerouting, longer journeys, and reduced access for ships.
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Traffic Status in the Panama and Suez Canals
Traffic and costs in the Panama and Suez Canals have increased this year due to higher demand for ship spaces and passages, stemming from disruptions in the Strait of Hormuz and the Bab-el-Mandeb Strait. Additionally, the Panama Canal Authority is facing increased exports of energy cargoes from the United States and container traffic from Asia to the U.S. East Coast during the peak container shipping season from August to October.
Traffic in the Panama Canal has recently been limited to 34 ships as of September 4, and reduced to 32 ships as of September 15, due to low rainfall in the canal's watershed caused by the super El Niño phenomenon. Furthermore, the average auction price for passage through the canal in August increased to over $1 million, which is 16 times higher than last year.
This crisis in the Strait of Hormuz has led to an increase in the passage of oil, petroleum products, and LNG through the Panama Canal, while Asia seeks to meet its needs from the United States. The average auction price for a space in the canal before the onset of conflicts in the Middle East was between $135,000 to $140,000, but after the war began, this figure rose to about $385,000 in March and April.
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