The Panama Canal The administrator praised the canal’s logistics capabilities and plans to improve supply chain preparedness as the Strait of Hormuz comes to a near standstill due to the US-Israeli attacks on Iran.
The operator of the Panama Canal said the waterway is ready to help stabilize global energy supply chains as the Strait of Hormuz slows dramatically following the US-Israeli attacks on Iran. (LUIS ACOSTA/AFP via Getty Images/Getty Images)
“What we see is that LNG prices are likely to increase, which means the current cost of inventory on the ship will increase,” he continued. “Fuel prices will rise.”
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Morales predicts that transit through the Panama Canal will increase as restrictions in the Strait of Hormuz remain.
“The Panama Canal should have one or two transits per day, while we used to have about three transits per day,” Morales added. “So it will kind of emerge and move from the East Coast of the United States to Asia.”
The Strait of Hormuz normally facilitates the transit of approximately 20 to 21 million barrels of oil per day. As of last Friday, only four cargo ships have successfully transited the strait, and one of those ships was carrying corn.
With roughly a fifth of the world’s oil normally flowing through the Strait of Hormuz, the near standstill of traffic has exacerbated global energy concerns and underscored the Panama Canal’s strategic role as an alternative shipping route. (Giuseppe Cacace/AFP via Getty Images/Getty Images)
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By comparison, about 2.3 million barrels pass through the Panama Canal every day.
About a fifth of the world’s oil trade and a quarter of the world’s total seaborne oil trade takes place through the Strait of Hormuz.
As for the Panama Canal, the operator said they have enough water and a maximum draft that allows more ships to pass.
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The manager also addressed the threat of tariffs that have shaken global trade with the US since president Donald Trump took office and noted an increase in traffic due to tariff threats.
An aerial view of the port of Fujairah, United Arab Emirates, in the Strait of Hormuz. (REUTERS/Stringer/Reuters)
President Donald Trump gave his signal willingness to reopen the strait as he spoke to reporters on Monday, noting China’s dependence on the route, and saying he wants to keep the passage open.
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“We’re really helping China here and other countries because they get a lot of their energy from the Strait,” Trump said. “We have a good relationship with China. It is my honor to do that.”
President Trump emphasized that keeping the Strait of Hormuz open benefits major energy consumers like China, and warned Iran that the US would respond strongly to any attempt to block oil shipments through the critical waterway. (The White House via X Account/Anadolu via Getty Images / Getty Images)
“I mean, we’re doing this for the other parts of the world, including countries like China,” Trump added. “They get a lot of their oil through the straits.”
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The president posted in Truth Social on Monday evening that the US would retaliate against Iran “TWENTY TIMES HARDER” if it took any action that stop the oil flow through the Strait of Hormuz.
“Furthermore, we will eliminate easily destructible targets that will make it virtually impossible for Iran to ever be rebuilt as a nation again – Death, Fire and Rage will reign over them – But I hope and pray that does not happen! This is a gift from the United States of America to China, and all those countries that heavily use the Strait of Hormuz,” Trump wrote.
