Panama Canal Restrictions Are Landing on an Already Broken Chokepoint Map

The Panama Canal Authority has announced that daily transit slots at the Neopanamax and Panamax locks will be restricted starting September 4, with an average of 34 transits per day. This is a significant decrease from the previous average of 35 transits per day through June, and it reverses a previous pledge not to restrict passage this year.

The Canal Authority had reduced the maximum draft capacity of the Neopanamax locks on July 3 and July 24, and further cuts were implemented on September 2 and October 1, following low levels of Gatún Lake. The reduction in capacity is due to the Panama Canal's rainy season running from May to November, and concerns about water availability during the next dry season, expected between January and April 2027.

The reduced capacity is a response to a shortfall that has already occurred and reflects the forecasted impact of the 2026-2027 El Niño on water levels. The restrictions imposed during a failing refill of the lake are a forecast based on the rainfall across September, October, and November. These restrictions are forcing ships to take longer routes, adding approximately 4,000 to 6,000 nautical miles and 10 to 14 days per voyage, and increasing fuel costs by around $600,000 per voyage.

This has led to a significant diversion of traffic through the Cape of Good Hope, with six Saudi-flagged tankers routing through the Cape while in ballast, indicating a fleet-level policy to avoid the Panama Canal corridor.