Isaac Herzog's arrival in Panama City on May 6, the first state visit by an Israeli president to the country, was framed by Jerusalem as an exercise in bilateral diplomacy. The Israeli Foreign Ministry described it as a chance to "deepen ties" and celebrate Panama as a "true friend." Neither characterisation is false. Neither is sufficient.

The visit is best understood as a five-front strategic operation, executed at the moment of Israel's deepest international isolation since the Nakba in 1948, and in the context of a global maritime crisis that has fundamentally altered the Canal's geopolitical value.

Herzog's itinerary began at the Miraflores locks, where he described the Canal as "a beautiful example of how to promote freedom of navigation and maritime freedom, in contrast to what we see in the Strait of Bab al-Mandab in the Red Sea, or in the Strait of Hormuz in the Gulf." The statement was deliberate.

Since February 28, when the United States and Israel launched strikes against Iran that killed Supreme Leader Ali Khamenei, the Strait of Hormuz, through which approximately 20% of the world's oil and liquefied natural gas transited in peacetime, has been largely closed to vessels associated with Washington or Jerusalem. The International Energy Agency has warned that the resulting supply disruption is the largest in the oil market's modern history, exceeding the 1970s shocks. Some 2,000 vessels remain stranded in the Gulf. The Iran-backed Houthis in Yemen have simultaneously threatened to close Bab al-Mandab, which would together block roughly a quarter of global energy supply.

In that context, the Panama Canal has been elevated from a commercially convenient shortcut to the primary functioning maritime artery of the Western hemisphere. Israel, which co-initiated the chain of events that closed Hormuz, arrived in the small Central American nation to position itself as a champion of open waterways, a rhetorical manoeuvre that functions only if the audience does not connect both facts simultaneously.

The Israeli Foreign Ministry was unusually candid about a second objective, describing Panama as a "true friend of Israel and a current member of the UN Security Council." Panama holds a two-year non-permanent seat on the Council, and its voting record is instructive. Panama was one of just 12 countries to abstain from a September 2024 General Assembly vote supporting a two-state solution, and it similarly abstained from a 2024 resolution calling on Israel to end its occupation of Palestinian territory. In March 2026, Panama voted in favour of Resolution 2817, which condemned Iranian attacks against Gulf states, aligning with the US-Israeli position. Herzog's visit is, in significant part, an effort to consolidate that alignment for the remainder of Panama's Council term, during which more resolutions on Gaza, Hormuz, and the broader Iran conflict will likely come to a vote.

A third layer involves infrastructure. In January 2026, Panama's Supreme Court declared unconstitutional the contracts under which CK Hutchison Holdings, a Hong Kong-based firm, had operated the ports of Balboa on the Pacific and Cristóbal on the Atlantic, the two terminals flanking the Canal. The ruling followed sustained pressure from President Donald Trump, who had threatened to "retake" the Canal soon after taking office in January 2025, citing Chinese control as a security threat.

The legal battle had a notable prelude: in late 2025, CK Hutchison had agreed to sell its portfolio of 43 ports across 23 countries — including Balboa and Cristóbal — to a BlackRock-led consortium valued at approximately $23bn. Beijing intervened through regulatory pressure and blocked the deal before it could close. The Supreme Court ruling rendered the question moot for the Panamanian terminals specifically, with Danish shipping giant A.P. Møller-Mærsk and MSC designated to take over temporary operations. CK Hutchison responded by threatening legal action against Mærsk and initiating international arbitration seeking more than $2bn in damages. China suspended COSCO operations at Balboa and summoned representatives of Mærsk and MSC for what Beijing described as "high-level talks."

Israel arrives in Panama as that vacuum is still being filled and the legal dispute remains unresolved. Its strong alignment with the Trump-Washington axis makes the visit a signal about which bloc Panama is being drawn into. Around 40% of US container traffic passes through the Canal annually, representing approximately $270bn in annual cargo.

President Mulino was explicit about a fourth objective: a government-to-government agreement on water management. "We have discussed the water issue with the intention of closing an agreement soon so that Israel can advise us on water," Mulino told reporters at a joint press conference on May 6. "I am certain that without bureaucracy and without so many formalities, we can make this collaboration effective."

The 2023–24 drought reduced daily Canal transits from a normal 34–36 vessels to just 18, a historic low, as Lago Gatún, which both feeds the locks and supplies drinking water to over 2mn Panamanians, dropped to critical levels. Canal revenues, which represent between 7% and 9% of Panamanian GDP, collapsed during that period. Transits of liquefied natural gas vessels remain approximately 73% below pre-drought levels, with carriers preferring the longer Cape of Good Hope route. A new El Niño episode is projected for mid-2026, and the $1.6bn Río Indio dam project approved by the Canal Authority in January 2025 will not be operational until 2032. The Jewish state, which produces roughly 80% of its domestic water consumption through desalination and recycles 90% of its wastewater — the highest rate globally — offers technology that Panama has a structural need for. The cooperation agreement, if concluded, would also embed Israeli technical presence in the management of the Canal's most critical vulnerability.

The model has a precedent. Mekorot, Israel's national water company, has signed consultancy agreements with twelve Argentine provinces since 2022, covering more than half the country, without public tender and with confidentiality clauses transferring geological and water data to the company. The "Fuera Mekorot" campaign, now active across Argentina, argues the agreements serve extractive industries over local communities. 

The fifth objective is the most explicitly regional. On April 19, Argentine President Javier Milei, the world's self-styled most Zionist leader, and Prime Minister Benjamin Netanyahu signed the "Acuerdos de Isaac," a framework for security, intelligence, trade and multilateral coordination explicitly modelled on the 2020 Abraham Accords. Israeli media reported in the days following the signing that Panama and Costa Rica had expressed interest in joining the framework, with Ecuador and Paraguay also expected to accede. Herzog arrived in Panama 17 days later. His subsequent stop in San José for the inauguration of President-elect Laura Fernández Delgado, invited by the outgoing pro-Israel President Rodrigo Chaves Robles, mirrors the same sequencing. Israel signed a free trade agreement with Costa Rica in December 2025; Panama's trade agreement with Israel has been in force since January 2020.

The architecture is legible: a chain of conservative governments — Argentina, Panama, Costa Rica, Ecuador, Paraguay, Uruguay (cited as a further candidate, despite being governed by a centre-left coalition) — being knit together through security agreements, intelligence-sharing and commercial frameworks, with Washington lurking as the implicit guarantor. The Israeli Foreign Ministry has hailed 2026 as a year of "renewed momentum" in relations with Latin America. The momentum is real. So is the pressure that has made it necessary.

The official choreography in Panama City was spoiled by organised dissent. Activists from the Coordinadora Panameña de Solidaridad con Palestina (Copasolpa) gathered at two points, the Cinta Costera seafront and the Iglesia del Carmen, carrying Palestinian and Panamanian flags and placards printed with images of destroyed buildings and wounded children. The turnout was not large enough to disrupt Herzog's agenda, but the political charge was specific and pointed.

Copasolpa organisers did not limit their criticism to Israel. They directed it equally at President Mulino, arguing that the water cooperation agreement under discussion would open the door to privatisation of Panama's water supply: the same resource Israel is accused of weaponising against the civilian population in Gaza. "That same government is the one that denies water to Gazans as part of its genocidal policy," said Priscila Vázquez, a psychologist and Copasolpa member, adding that Panamanian authorities "cannot be complicit in international crimes."

Herzog departs for Costa Rica on May 8, where he will attend the inauguration of president-elect Laura Fernández Delgado, the next name on a list that should eventually include Uruguay as well. The Israeli president's Latin American grand tour is not a diplomatic visit with a beginning and an end. It is a construction site.