LC Market Intelligence 8/24: "Hormuz "Cleared"

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The Strait of Hormuz continues to impact the global supply chain: the U.S. claims the mines are cleared and Iran claims the strait reopens only when it says so. That's rerouting cargo to the Panama Canal, where a shipper just paid $5.3 million to jump to the front of the line. El Niño is piling on Panama too, cutting canal rainfall enough to force transit cuts through mid-September. And the same war behind all of it just hit the pump: U.S. diesel stockpiles are now at their lowest seasonal level on record.

Here is what is moving the market this week

750M bbls

Crude moved through Hormuz since the blockade began

$5.3M ▲

Record Panama Canal transit slot auction bid

32/day ▼

Panama Canal transits, cut from 36 by mid-September

103.4M bbls ▼

Lowest seasonal U.S. diesel stockpile on record

01

Strait of Hormuz

Hormuz "Cleared" — But Not Really

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Mine Clearance: CENTCOM confirms Navy divers, SEALs, and air power cleared sea mines from Hormuz's main shipping lanes. Since the blockade began, 1,500 vessels have transited the strait, carrying 750 million barrels of crude.

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Threat Still Active: JMIC keeps its threat assessment at SEVERE despite the clearance, leading to continued risk from drifting or uncharted mines outside the cleared lanes.

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Traffic Still Suppressed: Only 37 U.S.-facilitated transits occurred over two days versus a 2025 daily average of 138, leading to a shipping market still far from pre-war capacity.

Track Hormuz Transit Risk →

Aerial view of cargo ships queued in the Strait of Hormuz

02

Panama Canal Auction

Panama Canal Slot: $5.3M and Climbing

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Record Auction: ▲ SK Gas Ltd. bid $5.3 million for a Panama Canal transit slot on Sept. 1, leading to a new all-time high that breaks the $4.6 million record set earlier this month.

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Demand Surge: ▲ The Iran war's disruption to global trade routes has pushed wait times for non-reserved vessels up to 17 days, leading shippers to pay premium auction fees just to keep schedules on Asia-bound routes.

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Tighter Restrictions: ▼ The canal authority is cutting the number of available slots and cargo capacity starting in September due to drought conditions, leading to even fiercer competition for transit windows ahead.

Rethink Your Panama Routing Now →

03

El Niño & Panama Canal

El Niño's New Chokepoint: Panama

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Canal Under Pressure: ▼ Drought tied to a record-strength El Niño is forcing the Panama Canal Authority to cut daily transits from 36 to 32 by mid-September, leading to auction prices for the largest locks jumping to $2.5 million from a typical $800,000.

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Compounding Chokepoints: Shippers already diverting from the Strait of Hormuz are piling onto Panama, leading to a waterway squeezed from both drought and rerouted global traffic at the same time.

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Broader Inflation Risk: El Niño-driven disruptions are hitting copper output in Chile and rice crops across Asia, leading economists to project higher consumer prices in emerging markets even as growth slows.

Prepare Your Routing for El Niño Delays →

Aerial view of container ship transiting the Panama Canal

04

Diesel Markets

Diesel Stockpiles Hit Record Low Ahead of Peak Season

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Historic Shortfall: ▼ U.S. distillate stocks fell to 103.4 million barrels for the week ending Aug. 21, leading to the lowest seasonal level recorded since data tracking began in the early 1980s.

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Supply Squeeze Compounds: Hormuz refined-fuel exports have collapsed and Russia is weighing an extended diesel export ban, leading to fewer alternative sources just as global demand typically peaks in October.

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Prices Near Record Territory: ▲ U.S. retail diesel is already above $5.60 a gallon, leading to costs sitting within 20 cents of the all-time high set in 2022.

Lock in Freight Rates Now →

Rows of white diesel storage tanks against a blue sky

Client Spotlight

Food Logistics covered Magnus Technologies' findings that U.S. diesel fell to $4.96 a gallon in July, its second straight monthly decline, with CEO Matt Cartwright noting that carriers face risk when surcharge programs lag behind a fast-moving fuel market in either direction.