Panama Canal fees spike to $4M as Hormuz disruption reshapes global shipping routes

Businesses have doled out up as much as $4 million to move boats through the Panama Canal with the Strait of Hormuz effectively closed, according to the Panama Canal Authority, in a move that has created a seismic shift in global trade flows.

While passage through the waterway usually comes at a flat rate via reservations, companies without reservations can cross by paying an additional fee in an auction for slots, which are awarded to the highest bidder rather than waiting for days off the coast of Panama City.

That price has ballooned in recent weeks as Iran and the United States have bottlenecked the key shipping route, the Strait of Hormuz, and demand for those slots has skyrocketed. Ships have increasingly traveled through the Panama Canal as shipments are rerouted and buyers purchase from other countries to avoid commerce through now-treacherous Middle Eastern waterway.

“With all the bombings, the missiles, the drones … companies are saying it’s safer and less expensive to cross through the Panama Canal,” said Rodrigo Noriega, a lawyer and analyst in Panama City. “All of this is affecting global supply chains.”

Meanwhile, Noriega said Panama’s government is “maximising what it can earn from the Panama Canal.”

The average price to cross through the canal ranges between $300,000 and $400,000 depending on the vessel. Previously, to get an earlier crossing, businesses would pay an additional $250,000 to $300,000. In recent weeks, the average additional cost has jumped to around $425,000.

Ricaurte Vásquez, the canal’s administrator, said another company that he would not name paid an extra $4 million when its fuel vessel had to change its destination because of ongoing geopolitical tensions.

“It was a ship carrying fuel to Europe, and they redirected it to Singapore, and it needed to get there because Singapore is running out of fuel,” he said.

Other oil companies paid an excess of $3 million in addition to the crossing fee to accelerate their passage in the face of soaring oil prices.