Businesses have paid as much as $4 million in additional fees to cross the Panama Canal on short notice, as the effective closure of the Strait of Hormuz prompts companies to reroute global supply chains.
The Panama Canal Authority confirmed the spike in last-minute bookings, with companies without pre-arranged reservations competing in an auction for crossing slots. The highest bidder secures passage ahead of vessels queued off the coast of Panama City.
The surge in demand follows a standoff between Iran and the United States over access to the Strait of Hormuz, a critical chokepoint for global oil shipments. “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.”
Standard canal crossing fees range from $300,000 to $400,000 depending on vessel size. Premium fees to jump the queue typically added $250,000 to $300,000. In recent weeks, that additional charge has climbed to around $425,000 on average.
Ricaurte Vásquez, the canal’s administrator, said one fuel carrier paid an extra $4 million after redirecting its cargo from Europe to Singapore due to geopolitical disruptions — Singapore was running low on fuel supplies. Other oil companies paid more than $3 million above the standard fee to expedite passage as crude prices surged.
Vásquez said the high costs reflected urgency rather than congestion at the canal itself. “They decide how high to go on the price,” he noted.
Brent crude briefly traded above $107 per barrel this week, up from around $66 a year ago. The canal handles roughly 6 percent of global trade, including car parts, grain and consumer electronics moving between China, Europe and the U.S. East Coast.
The Panama Canal has recovered from years of drought-related disruptions. However, its size limits its usefulness for the largest oil tankers — ultra-large container vessels cannot fit through the locks, making it unsuitable as a wholesale replacement for Hormuz routes.
Panama’s foreign ministry said Iran had illegally seized a Panamanian-flagged vessel, the MSC Francesca, in the Strait of Hormuz. “This represents a serious attack on maritime security and constitutes unnecessary escalation,” the ministry stated, calling for the strait to remain open to international navigation.
Noriega said canal auction costs could rise further if the Iran conflict persists.