China ramps up detentions of Panama-flagged vessels amid Canal tensions

The BRS Weekly Tanker Newsletter dated 4 May was cited in Tradewinds regarding the recent surge in Panama-flagged vessel detentions in China: https://www.tradewindsnews.com/tankers/this-vlcc-rate-surge-feels-different-to-all-the-others-say-brokers/2-1-1902499

China’s detention of Panama-flagged vessels has surged in recent months, increasingly turning a routine port state control regime into a source of operational and geopolitical risk for shipowners. According to shipping data, 136 Panama-flagged vessels were detained in Chinese ports in April, more than six times the 2025 monthly average and sharply above the 93 detained in March and 20 in February. The acceleration reportedly followed verbal instructions from Chinese authorities to intensify inspections of Panamanian tonnage after Panama stripped Hong Kong-based CK Hutchison of its concession to operate two terminals in Panama, placing the issue at the centre of a broader US-China contest over access to the Panama Canal and influence in Latin America.

Although most detentions lasted only a few days, they disrupted schedules and increased uncertainty for Panama-flagged operators with exposure to China. The measures appear to extend beyond inspections alone, with COSCO suspending services at Balboa and Chinese leasing houses reportedly encouraging owners to reflag away from Panama as part of newbuilding financing discussions. If sustained, the measures could gradually weaken the attractiveness of the Panama registry for internationally trading vessels and trigger a shift towards alternative registries.