Panama Canal to cut maritime traffic again due to El Nino

The Panama Canal is set to reduce maritime traffic once again due to the ongoing El Nino weather pattern, it has been announced. Currently, about 5% of global trade passes through the waterway, which relies on water to power its locks for lifting and lowering ships. This requirement becomes particularly crucial during droughts, as experienced in Central America, posing significant challenges for the canal's operation.

The administration of the Panama Canal has already cut daily transits from 36 to 32 in September to conserve water. It is now planning to further reduce this number to an average of 29.5 transits per day starting from October, according to a draft budget submitted to Panama's parliament. Minister of Canal Affairs, Jose Ramon Ycaza, emphasized that this budget ensures the canal's safe, continuous, efficient, and profitable operation.

This year's El Nino is anticipated to be the strongest in four decades. In 2023, a similar phenomenon led to a reduction in daily transits from 38 to 22. Additionally, the US-Israeli conflict with Iran has increased canal traffic due to the chokepoint situation in the Strait of Hormuz, which is a key conduit for a fifth of the world's oil and gas.