Panama Canal<\/a> According to the Panama Canal Authority, the Strait of Hormuz has been effectively closed, causing a seismic shift in global trade flows.<\/p>\nWhile waterway passage is generally at a flat rate through reservations, companies without reservations can cross by paying an additional fee in an auction for a slot, which is awarded to the highest bidder rather than waiting several days off the coast of Panama City.<\/p>\n
That price has surged in recent weeks as Iran and the United States have blocked the key shipping route, the Strait of Hormuz, and demand for those slots has skyrocketed. Ships are increasingly traveling through the Panama Canal as shipments are rerouted and buyers now shop from other countries to avoid commerce through the dangerous Middle Eastern waterway.<\/p>\n
“With all the bombings, missiles, drones… companies are saying it’s safer and less expensive to transit the Panama Canal,” said Rodrigo Noriega, a Panama City lawyer and analyst. \u201cAll of this is impacting global supply chains.\u201d<\/p>\n
Meanwhile, Noriega said the Panamanian government is “making the most of what it can earn from the Panama Canal.”<\/p>\n
The average price to transit the canal is between $300,000 and $400,000, depending on the ship. Previously, to obtain the first crossing, businesses had to pay an additional $250,000 to $300,000. In recent weeks, the average additional cost has risen to nearly $425,000.<\/p>\n
Canal administrator Ricaurte Vasquez said another company said it would not pay an additional $4 million when its fuel ship had to change its destination due to ongoing geopolitical tensions.<\/p>\n
“It was a ship carrying fuel to Europe and they redirected it to Singapore, and it needed to get there because Singapore was running out of fuel,” he said.<\/p>\n
Other oil companies paid an additional $3 million in crossing fees to speed up their passage in the face of rising oil prices. <\/p>\n
Vasquez said there is not a backlog of ships in the canal, but the costs can be attributed to last-minute shifts and the greater urgency for ships to get from one point to another faster in the wake of greater trade chaos.<\/p>\n
Vasquez emphasized that the cost was not a broad market rate, but a temporary toll borne by companies.<\/p>\n
\u201cThey decide how high to set the price,\u201d Vasquez said.<\/p>\n
While it is earning more money from new business, the Panamanian government has also been dealt a blow due to geopolitical conflicts.<\/p>\n
On Wednesday, the country’s Foreign Ministry accused Iran of illegally seizing a Panama-flagged ship from Italian company, MSC Francesca, in the Strait of Hormuz. <\/p>\n
Panama, the country with the world’s largest ship registry, said the ship was “forcibly taken” by Iran. It was not immediately clear whether the boat would remain in Iranian custody.<\/p>\n
\u201cThis represents a serious attack on maritime security and an unnecessary escalation at a time when the international community is advocating for the Strait of Hormuz to be kept open to international navigation without any form of threat or coercion,\u201d it said.<\/p>\n
Analyst Noriega said the amount companies have to pay to transit the Panama Canal could only increase if the conflict continues, with oil prices already skyrocketing. Briefly the price of a barrel of Brent crude oil Jumped above $107<\/a> this week, up from about $66 a barrel a year ago.<\/p>\n“Nobody really predicted the potential effects (the war) would have on global trade,” Noriega said.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Panama City — Businesses have spent up to $4 million to move boats Panama Canal According to the Panama Canal Authority, the Strait of Hormuz has been effectively closed, causing a seismic shift in global trade flows. While waterway passage is generally at a flat rate through reservations, companies without reservations can cross by paying<\/p>\n","protected":false},"author":1,"featured_media":94024,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[3265,4815,659,375,3324,15275,2067,5248],"class_list":{"0":"post-94015","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bible-news","8":"tag-businesses","9":"tag-canal","10":"tag-hormuz","11":"tag-million","12":"tag-paid","13":"tag-panama","14":"tag-strait","15":"tag-transit"},"_links":{"self":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/94015","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/comments?post=94015"}],"version-history":[{"count":1,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/94015\/revisions"}],"predecessor-version":[{"id":94025,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/94015\/revisions\/94025"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/media\/94024"}],"wp:attachment":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/media?parent=94015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/categories?post=94015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/tags?post=94015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}