Strait of Hormuz closure raises Panama Canal tolls to record levels

The cost of crossing the Panama Canal has soared to record highs, with some companies paying up to $4 million to secure rapid passage through the canal, amid the growing pressure from the Strait of Hormuz crisis.

The transit system relies on advance bookings, while companies without appointments resort to auctions that give priority to transit to the highest price.

Disruption to navigation in the Strait of Hormuz has led to a major change in international shipping lanes, with many companies opting to pass through the Panama Canal to avoid geopolitical risks in the Middle East, causing demand for the canal to increase and transit prices skyrocketing.

Panamanian media reported that 6,288 transits were recorded through the Panama Canal between October 2025 and March 2026, an increase of 224 percent compared to the same period last year.

Hundreds of thousands of dollars in fees

According to data from the Panama Canal Authority, the additional fees for speeding up transit have recently risen to about $425,000, compared to $250,000 to $300,000 previously, while the basic fees range between $300,000 and $400,000, depending on the type and size of the vessel.

The Panama Canal management official revealed that one company paid about $4 million more to reroute an oil cargo ship and speed up its transit, while others paid more than $3 million to secure urgent passage amid the turmoil in global energy markets.

Analysts explained that tensions in the Strait of Hormuz were directly reflected in oil prices and supply chains, as the price of Brent crude rose significantly, increasing the cost of shipping and pushing companies to more expensive but less risky options.

Experts have warned that continued disruption to vital shipping routes could lead to further pressures on global trade, with transit fees and energy prices likely to continue to rise if geopolitical tensions are not contained.

Global maritime trade is witnessing widespread disruption as tensions related to the closure of the Strait of Hormuz escalate, prompting shipping and energy companies to redirect their routes towards safer alternatives, most notably the Panama Canal, which recorded an unprecedented rise in transit fees reaching millions of dollars, amid fierce competition for transit times and significant changes in international trade flows.

Iran closes Strait of Hormuz

On April 8, Washington announced a two-week truce with Tehran to allow negotiations on a deal to end the war, before later extending it "until Tehran submits its proposal" on the deal, without specifying a duration.

With talks stalemate amid intensified positions, the United States on April 13 began a naval blockade of Iranian ports, including those on the Strait of Hormuz, and Tehran responded by closing the strait, through which 20 percent of global oil exports passed before the war.

The Strait of Hormuz is one of the world's most important sea lanes, through which about 20-30 percent of the world's total flows of liquefied natural gas and oil pass.

The United States and Israel began a war on Iran on Feb. 28, leaving more than 3,000 people dead, before Washington and Tehran announced a temporary truce brokered by Pakistan on April 8, in the hope of reaching an agreement ending the war.

Goldman Sachs: Gulf oil production may recover within months after opening Hormuz

Goldman Sachs said oil production in the Gulf is likely to recover significantly within a few months of the full reopening of the Strait of Hormuz, after a sharp decline from the war on Iran, but warned that it could take longer in some scenarios.

About 14.5 million barrels per day of crude oil production in the Gulf, equivalent to about 57 percent of pre-war supplies, is mainly  due to precautionary shutdowns and inventory management, rather than direct physical damage to oil fields, the bank said in a research note.

The bank stressed that the safe and sustainable reopening of the strait, in the absence of new attacks on oil infrastructure, may allow production to be restored at a relatively rapid pace, supported by the spare production capacity of Saudi Arabia and the UAE.

However, he warned that the recovery process will remain constrained by logistical and technical factors, most notably a decline in the capacity of empty tankers in the Gulf by about 130 million barrels, or nearly 50 percent, limiting the speed of oil transportation once exports resume.

He also pointed out that the closure of wells for long periods may lead to low flow rates, especially in low-pressure fields, which requires maintenance work before full production is restored. He explained that the long period of shutdown increases the chances of a slowdown in the recovery.

He added that the average forecast of international agencies indicates that about 70 percent of lost production could be recovered within three months and about 88 percent within six months, warning that the continued closure of the strait for longer periods could increase the risk of permanent damage to oil supplies.

What is  the Panama Canal?

The Panama Canal is one of the most important waterways in the world, as it forms a strategic link between the Atlantic and Pacific Oceans through the Isthmus of Panama in Central America, with a length of about 82 kilometers, and since its opening in 1914, the canal has become a major hub for international trade, as it provides thousands of nautical miles that ships had to travel around Cape Horn in the southernmost part of the American continent.

The canal is an artificial passage that does not depend on sea level, but operates through a complex geometric docking system that lifts ships to the level of Lake Gatun at a height of 27 metres, before lowering them back to sea level on the opposite side. The crossing process usually takes about 10 hours and can take up to 25 hours, depending on traffic and waiting times.

The state-run Panama Canal Authority has operated the sea lane since it was transferred from the United States to Panama in 1999, and the canal has undergone a major expansion in recent years with the construction of a third group of canals, allowing for the reception of giant ships that were previously unable to cross.

The canal's strategic importance lies in its ability to provide up to 8,000 nautical miles in flights between the east and west coasts of the Americas, making it one of the main pillars of global shipping networks and a pivotal economic tributary to the host country.