A South Korean gas company has paid a record-breaking $5.3 million at auction to secure a transit slot through the Panama Canal, dodging imminent shipping cuts triggered by a severe El Niño-induced drought.
SK Gas secured the slot for its tanker, the G. Spirit, to pass through the waterway on September 1. This transit comes just two days before the Panama Canal Authority is scheduled to implement a fresh round of daily transit reductions. On Tuesday, Panama declared an emergency as the regional drought continues to deplete the critical water reserves required to operate the canal's lock system.
The canal, which manages approximately five percent of global maritime trade, is facing severe water stress. Rainfall deficits have reached up to 60 percent on Panama's Pacific coast, and 11 watersheds are currently experiencing critical water shortages. This drought is fueled by El Niño, a weather pattern that warms ocean surface temperatures in the central and eastern equatorial Pacific, disrupting global atmospheric pressure, wind, and rainfall patterns. Experts warn that the weather phenomenon is expected to intensify, with its impacts potentially lingering until May 2027.
To manage the crisis, canal authorities will lower daily vessel transits from 36 to 34 starting September 3, with a subsequent reduction to 32 later in the month. This is not the first time the waterway has faced such restrictions; in 2023, extreme low water levels forced operators to slash daily transits from 38 down to 22.
Under normal conditions, maritime operators book their canal transits far in advance. Ships without prior reservations face an average waiting time of five days, though last-minute passages can be won through official auctions. The average price paid at these auctions between October 2025 and February 2026 was roughly $55,000 (€47,000).
However, growing delays and geopolitical tensions have recently sent auction prices soaring. In April, a vessel carrying liquefied natural gas paid $4 million (€3.4 million) to bypass the queue, a surge driven in part by increased cargo demand stemming from conflict in the Middle East. The $5.3 million paid by SK Gas now represents the highest auction fee ever recorded for a single transit.
