Growing congestion at the Panama Canal is changing LPG tanker deployment, with operators turning to unusual ship-to-ship transfers and, in at least one case, a lengthy diversion around South America.

Vessel-tracking data and shipping market sources indicated that two large gas carriers recently conducted a transfer off Balboa, on Panama’s Pacific coast. The operation could allow one tanker to shuttle cargo through the canal while another handles the longer Pacific voyage to customers in Asia.

The vessels involved were the Panamax tanker Energia Grandeur and the wider Neopanamax Eneos Wisdom. Energia Grandeur was transferring LPG to Eneos Wisdom after previously sailing across the Pacific toward Japan and then reversing course. Traders said the change suggested that deploying the Panamax vessel as a canal shuttle offered greater value than committing it to a voyage to Asia lasting about a month.

Both vessels were chartered by TotalEnergies. The company declined to comment, as did Eneos Holdings, which holds an interest in the ship manager of Eneos Wisdom. MOL Energia, identified as the owner and ship manager of Energia Grandeur, did not respond to a request for comment.

Canal traffic has increased as the Iran war diverted more vessels toward the waterway. At the same time, canal authorities have tightened limits on vessel cargo intake and the number of daily transits because of drier El Niño-related conditions. Ships without advance reservations have faced longer waits, while some operators have paid millions of dollars to secure earlier passage.

A canal spokesperson said on Friday that 14 vessels without reservations were waiting near the waterway, alongside 115 ships scheduled to transit. Unbooked vessels seeking northbound passage faced waits of up to eight days, while the maximum reported delay for southbound traffic was four days.

The disruption has had its greatest effect on Neopanamax vessels, which commonly transport LPG from the US Gulf Coast to Asian markets. Narrower Panamax gas carriers use a separate lock system and have not experienced the same increase in waiting times and rates, according to traders.

The congestion has also led the supertanker Gas Scorpio to sail around South America to load cargo in the United States. The vessel was reported off Chile during a voyage expected to add about a month to its transit time. A similar routing was last recorded in 2023, when low rainfall disrupted Panama Canal operations.

The developments add another logistical constraint for an LPG market already affected by tensions around the Strait of Hormuz, illustrating how geopolitical disruption and climate-related water restrictions are reshaping tanker routes and cargo movements.