Panama Canal Congestion Diverts Gas Tankers
Congestion at the Panama Canal is forcing gas tankers into unusual operations, including a ship-to-ship transfer to enable a shuttle service and a rare
Growing congestion at the Panama Canal is forcing gas tankers into unusual journeys. The situation, driven by the Iran war and drier conditions from El Niño, has increased wait times and prompted creative shipping solutions.
According to vessel-tracking data, traders, and shipbrokers, two supertankers were recently observed conducting an unusual ship-to-ship transfer off Balboa port on Panama’s Pacific coast. Traders said the process allows one tanker to shuttle back and forth through the canal, ensuring a steady flow of liquefied petroleum gas (LPG) to Asian customers.
A canal spokesperson said on Friday that 14 ships are currently waiting near the canal without reservations, with 115 scheduled to transit. Of those without bookings, northbound vessels face a maximum wait of 8 days, while southbound ones wait up to four days. Some operators are paying millions to jump the queue.
Canal Impact on Tanker Classes
The biggest impact has been on wider Neopanamax vessels, typically used to ferry LPG from the U.S. Gulf Coast to Asia. Rates and wait times for narrower Panamax tankers, which use a separate set of locks, have not increased as much, traders said.
Off Balboa, the Panamax tanker Energia Grandeur is transferring its cargo to the Neopanamax Eneos Wisdom. The Energia Grandeur was previously carrying LPG toward Japan before turning back. Traders suggested its charterer saw more value in using the ship to shuttle gas through Panama than on a month-long journey to Asia.
The two supertankers were chartered by TotalEnergies SE. The French oil and gas major, along with Eneos Holdings Inc., declined to comment. MOL Energia Pte., the owner and ship manager of Energia Grandeur, did not respond to a request for comment.
Alternative Route Around South America
Separately, the Panama logjam has prompted another supertanker, the Gas Scorpio, to embark on a rare voyage around South America to load a cargo in the U.S. This costly trip adds around a month of transit time. The vessel is currently off Chile. A similar voyage was last made in 2023 after low rainfall snarled canal traffic.
Julian Renton, lead analyst covering natural gas liquids at East Daley Analytics, commented on the strain. "The global LPG market is already stretched thin from Strait of Hormuz tensions, and the Panama Canal is one more disruption it simply couldn’t afford," he said. "It’s a vivid illustration of how geopolitics, climate, and energy security are colliding in real time."
The report, sourced from Bloomberg and published on gCaptain, also contained unrelated updates on the Rhine river water levels and U.S. mine-clearing operations in the Strait of Hormuz.
