Global Shipping Costs Explode as Hormuz Disruptions Hit Key Trade Routes
Macron Calls for Another Emergency Oil Release as Europe Loses Supply What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… The Middle East crisis has reverberated through key global shipping chokepoints thousands of miles away from the Strait of Hormuz.
Following the crippled tanker traffic through the Middle East’s main oil and LNG export outlet, the Panama Canal and the Suez Canal have seen an increase in energy commodity cargo traffic in the past half year.
As a result, shipping costs have soared to record highs, and some vessel operators are willing to pay $4-5 million in an auction to secure a single passage through the Panama Canal on a certain date.
Shipping costs on all global lanes are skyrocketing as trade becomes less efficient amid re-routes, longer voyages, and falling tanker availability.
The chaos at the Strait of Hormuz is being felt at America’s trade gateway, the Panama Canal, and at the shortest route from Asia to Europe, the Suez Canal.
Traffic and fees at the Panama and Suez Canals have jumped this year, reflecting higher demand for vessel slots and passage because of the Strait of Hormuz and Bab el-Mandeb disruptions.
Separately, the Panama Canal Authority has to contend with increased energy cargo exports from the United States and higher Asia-to-US East Coast container traffic at the peak August-October container shipping season ahead of the holidays.
In addition, Panama Canal traffic hasrecently been cappedat 34 vessels from September 4, then to 32 ships from September 15, due to reduced rainfall in the Canal’s watershed as a result of the Super El Niño.Related: The Oil Market’s Backup Plan Is Breaking Down And bids on daily auctions to secure slots through the Panama Canal have soared to an average of above $1 million in August,up by 16 timesfrom a year ago.
Slots for September have come with pricier, and record, tags.
At the end of August, South Korea’s SK Gas has reportedly paid as much as $5.3 million to secure a passage on September 1, sources with knowledge of the matter toldBloomberg.
The previous record-high slot fee – that’s on top of the regular transit fee – was also set in August, at $4.6 million, by another South Korean shipper.
According to the Panama Canal Authority, recent auction results have reflected “significantly stronger demand.” The median auction price paid before the war in Iran broke out in February was around $55,000.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
Comments
Post a Comment