The Cape of Good Hope captured about 43% of US-Asia liquefied petroleum gas voyages in April 2026, reaching its highest level since October 2016, according to a Vortexa note on Monday.
Vortexa strategists attributed the surge to high Panama Canal auction prices and Argus data showing that unbooked waiting times have soared.
The surge in ton-miles is tightening Very Large Gas Carrier supply and boosting freight rates on the Baltic US Gulf-to-Japan route, according to Vortexa, which expects this tightness to intensify through early June amid longer voyage times that delay vessel returns.
Vortexa said VLGCs and Very Large Ethane Carriers appear to display "business-as-usual" behavior in the Panama Canal. The number of VLGCs and VLECs waiting at the North Panama waypoint, along with daily southbound transit volumes, remained moderate in early May 2026 and did not increase.
However, oil tanker deployments show a markedly different trend. The four-week moving average of oil tankers waiting rose from 25 in the week ending March 1, before the Hormuz crisis, to 45 by mid-April, a record high in Vortexa's 10-year dataset.
Spot cargoes sailing through the Panama Canal without a pre-booked transit slot incur extra costs that have become "prohibitive," Vortexa said.
Additionally, compliance requirements for vessels sailing through the Panama Canal have added to the squeeze.
This has pushed shippers to increasingly view the Cape of Good Hope as a more favorable rerouting option than the Panama Canal.
Waypoint entry data for the Cape of Good Hope showed a similar pattern.
US-Asia LPG voyage counts through the Cape of Good Hope hit record highs in the week of May 4-10, Vortexa data revealed.
About 43% of US Gulf Coast LPG voyages bound for Asia transited via the Cape of Good Hope, the highest since October 2016, when the share reached 48%, and a sharp rise from 34% in February.
Vortexa described the ton-mile impact as "significant."
For comparison, Vortexa said a laden VLGC sailing at 15 knots on the Houston-Chiba route takes about 26 days, compared with 45 days via the Cape route, adding about 76% per laden voyage and thereby tightening vessel availability.
This vessel supply squeeze could also be traced in fleet distribution data. "Since the Strait of Hormuz crisis began, ballast VLGCs/VLECs had consistently outnumbered laden vessels, reversing the normal pattern," Vortexa said.
This trend surpassed the ballast-to-laden pattern seen from February to March 2020 during the Covid-19 pandemic.
As of early May 2026, laden VLGCs and VLECs outpaced ballast vessels for the first time since the conflict began.
This indicates that the surplus of idle tonnage repositioning westward has been absorbed, according to the note.
With Middle East Gulf loadings subdued amid the ongoing conflict, Houston-Chiba freight rates are facing "sustained upward pressure."
Vessel availability in the US Gulf Coast will remain reduced from late May through early June amid record-high ton-mile freight rates on the US-Asia route and potential return delays.
Atlantic Basin LPG imports have remained robust through May.
"For market participants trading on the USGC-to-Asia route, the combination of higher tonne-miles, freight rates, and elevated feedstock prices falls hardest on spot cargoes destined for Northeast Asian petrochemical players, especially Chinese buyers now increasingly shifting from term contracts to spot buying," Vortexa said.
However, longer voyages around the Cape also introduce timing risks.
For instance, a cargo loaded around mid-May is not likely to arrive until late June or early July. By then, volatile downstream margins could have deteriorated.
"The risk of arriving in a weaker market erodes the economics of a trade that looked profitable at the point of loading, and that risk grows with every additional day at sea, even before factoring in potential demurrage," the analysis said.
Demurrage is a shipping-related penalty imposed when cargo or containers are detained in a port or related infrastructure beyond their allotted time.
This will result in Asian petrochemical buyers facing a window of "persistent" margin pressure before the market corrects course.