Panama Canal Braces for Rise in Traffic Amid Iran War
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The piece contrasts the Iran crisis’ disruption of global trade through the Strait of Hormuz with evolving shipping patterns that could affect the Panama Canal. It notes that Hormuz remains a critical oil artery, moving up to about 21 million barrels per day, and that the canal-though a much smaller route at just over 2 million barrels per day-could see traffic shift as energy flows realign. Dr. Ricaurte Vásquez Morales, head of the Panama canal Authority, told Fox News that Middle Eastern energy still reaches Asia via the canal and that U.S. LNG shipments,after the Ukraine conflict,have shifted toward Europe but continue to route to Asia as needed; Qatar is highlighted as a major supplier to Asia. The report suggests the canal has the capacity to handle increased traffic and that recent volume gains were partly driven by tariff-related front-loading and inventory movements around the Lunar New Year. It also provides past and geopolitical context, noting Panama’s long control of the canal since 1977, ongoing interest from BlackRock in canal ports, and a nod to related developments reported by Axios.
The conflict in Iran has brought trade through the Strait of Hormuz nearly to a standstill.
On the other side of the world, another major trade route is bracing for impact — not from sea mines or ballistic missiles, but from an uptick in traffic.
Dr. Ricaurte Vásquez Morales, who serves as the authority administrator for the Panama Canal, said in an interview with Fox News that some energy extracted from the Middle East makes its way through the trade route.
“We have been through the years a major channel to move LNG from the U.S. to Asia,” Morales said, referring to liquefied natural gas.
“Qatar usually supplies Asia, and after the Ukraine war, most of the American LNG has gone to Europe to replace the Russian LNG.”
Morales predicted that the Panama Canal will see traffic “come up a little bit and moving from the East Coast of the United States to Asia.”
With respect to oil, Fox News noted that the Strait of Hormuz usually sees up to 21 million barrels move through every day.
That’s one-fifth of the world’s oil.
The Panama Canal meanwhile sees just over 2 million barrels of oil per day — a fraction of the moved in the Middle East.
Morales said that the Panama Canal has the capacity to handle a rise in traffic.
He added that increased tariffs from President Donald Trump have already caused traffic to rise.
“Over the last 12 months, it increased volumes through the Panama Canal because people were anticipating tariffs, and they tried to front load the cargoes, especially for the later part of the year for Christmas demand in the states,” he said.
“Now what we have is that essentially with the Lunar Year, they clear up all the inventories in Asia, so some of that has been moved into final destinations.”
The conflict in Iran and the impacts on the Panama Canal come months after Trump signaled that he wanted to re-acquire the trade route, which American engineers completed in 1914.
Panama has owned the route since 1977, and it was jointly run by Panamanian and U.S. authorities until 1999.
BlackRock, an American asset management company, has been attempting to purchase two ports on the Panama Canal from Hong Kong firm CK Hutchinson.
The deal has not yet gone through, according to a report from Axios published in January.
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