Businesses Spend Up To $4 Million To Cross Panama Canal Amid Hormuz Chokehold

Analyst Rodrigo Noriega noted that canal-crossing costs could continue to rise if the conflict persists, while canal administrator Vásquez emphasized that price spikes are driven by urgency and are temporarily shouldered by companies.

Brent crude rose briefly above $107 per barrel during the week, up from around $66 per barrel a year earlier.

Cargo such as car parts, grain, and consumer electronics moving from China to Europe or the U.S. East Coast pass through the canal. While some oil moves through, the canal is not a viable large-scale alternative to Hormuz due to its size; the largest oil carriers cannot use the canal.

The canal authority noted that the average crossing price now ranges between $300,000 and $400,000 depending on the vessel. Previously, paying an extra $250,000 to $300,000 could secure an earlier crossing; more recently, the average additional cost has risen to around $425,000.

Ricaurte Vásquez, the canal administrator, said one Panama-flagged fuel vessel redirected its destination to Singapore and paid an extra $4 million for crossing through the canal, due to ongoing geopolitical tensions affecting fuel supplies.

With the Strait of Hormuz traffic bottlenecked, demand for Panama Canal slots surged. Vessels without bookings paid higher prices in an auction to obtain crossing slots, while others risked waiting off the coast of Panama City.

Panama's foreign ministry said Iran illegally seized a Panama-flagged vessel, MSC Francesca, in the Strait of Hormuz. The ministry called the incident a serious attack on maritime security and an unnecessary escalation at a time when the international community is seeking open navigation through Hormuz.