Increased Traffic Through Panama Canal Due to Middle East Conflict

Ricaurte Vazquez, director of the Panama Canal Authority (ACP), mentioned on Thursday that the ongoing conflict in the Middle East is leading to a noticeable rise in traffic through the Panama Canal.

According to reports from la prensa, traffic has surged in recent weeks, with some days seeing up to 40 vessels, which is the maximum capacity allowed daily, officials noted.

The newspaper added that disruptions in global fuel supply chains—specifically for oil, liquefied natural gas (LNG), and liquefied petroleum gas (LPG)—have been caused by the conflict. These disruptions have pushed markets in Europe and Asia to search for new supply routes, primarily turning to the United States, which has become a significant hub for energy transportation.

In this context, la prensa reported that the Panama Canal is now essential for the timely delivery of various cargo, including energy products, to key destinations. For example, the tanker gas virgo, originally intended for Europe, was redirected to China, with the shipping company paying up to $4 million for urgent passage to avoid penalties.

Vazquez, speaking with reporters at a local event, confirmed the uptick in Canal traffic and shared details about the trade route’s status. He noted that LNG tanker traffic rose significantly, going from about four vessels per month in January to 15 in March. This surge is reportedly linked to the disruption of Qatar’s LNG production following the Iranian attack in early March.

Despite the increase in traffic, Vazquez stated that there is currently no congestion on the route. He likened the situation to more vehicles on the road during a festival, emphasizing that increased traffic does not always mean delays.

“There are no traffic jams. Some ships arrive early, some on time, and we manage to accommodate all of them,” he said.

In discussing the gas virgo situation, Vazquez explained that the $4 million payment for emergency passage was made due to the ship facing much higher penalties if delayed. He cautioned that such extreme cases shouldn’t be viewed as the norm, and even though immediate revenue increases are unlikely, they are still on track to meet budgetary targets.

“We don’t expect the situation in the Middle East to increase Canal revenues. It’s crucial to maintain reliability in demand for our services. When this route’s reliability is in question, as with other canals, people will seek alternatives,” he said.

Vazquez went on to clarify that while some ships are paying exorbitant amounts for transit slots, this accounts for “less than 5 percent” of those wanting to pass. Normally, a transit slot costs between $250,000 and $300,000, but prices currently range from $400,000 to $425,000.

“Our goal remains to provide reliable service to our customers, regardless of the cost,” he concluded.