Panama Canal tolls hit record high amid Iran conflict drought
The Panama Canal has experienced a record-high surge in transit costs, with the average daily bid for a transit slot reaching approximately $1.1 million in August 2026, more than sixteen times the same rate from last year. This increase is driven by dual factors: declining water levels, which reduce ships' cargo capacities, and rising demand for oil and petroleum product transits due to disruptions in the Strait of Hormuz and the development of the El Niño phenomenon. Lake Gatun, which supplies the canal, has fallen below its historical averages. Additionally, the Panama Canal Authority has imposed restrictions on ship drafts, leading to reduced cargo loads and longer wait times, with the number of ships waiting in the corridor rising to 113 compared to 40 at the beginning of the year. Transit costs continue to climb, exceeding one million dollars in some auctions. Conditions are expected to remain volatile, potentially further increasing these costs.
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