Iran war and rising fuel costs could boost Panama Canal traffic, administrator says

The Panama Canal's administrator says the war in the Middle East and higher fuel prices make the canal more appealing for shippers

PANAMA CITY -- PANAMA CITY (AP) — Panama Canal Administrator Ricaurte Vásquez said Thursday that the conflict in the Middle East and rising fuel costs could ultimately benefit the interoceanic waterway as global shippers adjust routes.

In an interview with The Associated Press, Vásquez said that higher energy, fuel and navigation costs could make the Panama Canal a more attractive option for commercial traffic.

“When costs increase, in general when the price of marine fuel rises, the Panama Canal becomes a more attractive route,” Vásquez said.

Oil prices have risen amid the war in the Middle East, which has led to the temporary closure of the Strait of Hormuz by Iran in response to U.S. and Israeli attacks. About one-fifth of the world’s oil passes through the waterway at the mouth of the Persian Gulf.

If higher energy costs persist, routing cargo through Panama can cut voyages by between three and 15 days, depending on the route, while reducing fuel consumption, he said.