Gas tanker pays $4.6M to skip Panama Canal line

An empty gas supertanker will jump the queue at the Panama Canal next week after paying $4.6 million for priority passage, as the ongoing Iran war and falling water levels push auction prices to new highs at the vital waterway.

Record Payment Amid Surging Demand

The liquefied petroleum gas tanker G. Arete will transit from the Pacific to the Caribbean side of the canal after securing the slot through the Panama Canal Authority's auction system, according to Bloomberg, citing traders, brokers, and a shipping report. The vessel is owned by South Korea's SK Shipping Co., though it remains unclear who paid the fee. Neither SK Shipping nor the canal authority responded to requests for comment.bloomberg+1

The $4.6 million payment exceeds a near-record $4 million paid earlier this week for a container ship to skip the line. The Maritime Executive reported on August 11 that the previous high since late July was $3.78 million for the Neopanamax locks, with average bids reaching $2.5 million.finance.yahoo+1

War and Weather Compound Congestion

The canal has faced mounting pressure since the Iran war began in February, when Tehran effectively blockaded the Strait of Hormuz, through which roughly one-fifth of global oil and gas exports normally pass. Combined with Houthi rebel attacks disrupting the Red Sea's Bab el-Mandeb Strait, the dual closures have funneled more vessels toward Panama.telegraph+1

Some Neopanamax-size vessels without booked transit slots have waited up to 11 days to secure passage at auction, the highest since May for Pacific-to-Atlantic transit, according to data from Argus Media. Daily auctions have averaged around $1.1 million so far in August, more than 16 times the average price during the same period last year, The Telegraph reported.finance.yahoo+1

El Niño Adds Further Strain

An El Niño weather pattern has compounded the problem by lowering water levels in the freshwater canal. The Panama Canal Authority has imposed draught restrictions on vessels in anticipation of a severe drought later this year. Ross Griffith, head of US crude freight pricing at Argus, told The Telegraph that "these water-saving measures come as Panama Canal transit demand has jumped following the resumption of hostilities in the Strait of Hormuz alongside renewed threats to shipping from the Houthis".telegraph

The United States is a major supplier of LPG to buyers in East Asia, and the canal remains the shortest route between the two regions — a dynamic that ensures demand for priority crossings will persist as long as the conflict continues.finance.yahoo