The tanker "Cururo" is making a long journey from Houston to Chile: sailing across the entire Atlantic coast of South America, crossing the Strait of Magellan, heading for the Pacific coast, and then unloading.
The voyage could take 32 days and sail more than 10,000 nautical miles (18,520 kilometers) until next week, while the typical route through the Panama Canal takes about 23 days and less than 5,000 miles.
Due to the severe drought in Panama, which is expected to change the flow of ** and push up freight costs, this long journey is a new reality for the shipping industry.
Smith, an analyst at ship-tracking service KPLER, said the change would mean less U.S. gasoline destined for the west coast of South America, particularly Chile. He added that Chile may instead import gasoline from Asia.
The Cururo "went to the Panama Canal last month, changing course due to the inability to obtain a place to pass. Two other product tankers, Green Sky and High Loyalty, have also opted for longer routes to and from Chile that avoid the Panama Canal.
Either opt for a longer route or bid in Panama's daily auction of slots, which makes it more expensive to transport tankers and other vessels that do not have priority in the canal.
Kpler's data also shows that more and more U.S. diesel is going to Europe as South America's diesel purchases have decreased due to the Panama Canal blockage. So far in December, about 45% of U.S. diesel exports have gone to Europe, compared with about 21% last month.
The change in the flow of refined products will also lead to an increase in shipping activity measured in tonne-mile terms, as will freight rates, as U.S. tankers that normally go to South America will now cross the Atlantic to Europe, or ships from Asia to South America will do the same, analysts said.