Tankers and cargo ships are facing three-and-a-half day delays to enter the Panama Canal as the Iran war sparks a surge in traffic, prompting one vessel to plunk down an extra $4 million to jump to the front of the line. The traffic jam at the 50-mile (82-kilometer) waterway — the most severe congestion since the historic 2023–2024 drought that slashed vessel passages — has developed as the near-shutdown of the Strait of Hormuz strangled oil, natural gas, fertilizer and chemical shipments from Persian Gulf nations.
Buyers scrambling for alternative supplies are relying on the canal to send those deliveries to markets in Asia and beyond. A tanker hauling liquefied petroleum gas (LPG) agreed to pay $4 million in a canal auction in recent days to expedite its passage. The auction fee sits on top of the normal cost to sail the canal, which can run into hundreds of thousands of dollars. Ships that make a reservation to enter the canal do not need to wait in line.
The Gas Virgo, a Singapore-flagged tanker controlled by China’s Wanhua Chemical, paid the record-tying fee. Wait time is the median over a seven-day period for all commercial cargo according to canal authorities. Competition for transits is therefore expected to remain firm, underpinning elevated auction fees through the rest of the year.
From a supply chain perspective, the Panama Canal is a critical Atlantic-to-Pacific chokepoint in global trade, alongside the Suez Canal, Strait of Hormuz, Strait of Malacca, Bab el-Mandeb, Cape of Good Hope, Turkish Straits and Danish Straits as the major maritime chokepoints. The Panama Canal Authority (ACP) manages booking, reservation and auction systems for Neopanamax, Panamax and Aframax-class vessels. Backup routes include the Cape of Good Hope, the U.S. land bridge (Long Beach — Houston — New York) and the Northern Sea Route. Maersk, MSC, CMA CGM, Hapag-Lloyd, Evergreen, ZIM, Wanhua Chemical, Reliance Industries, Aramco and QatarEnergy are bearing the direct logistical impact of the 2026 geopolitical crisis.
