Panama Canal to cut maritime traffic again due to El Nino

The Panama Canal is preparing for additional reductions in maritime traffic due to the ongoing El Nino weather pattern, which has already prompted a previous cut in the number of vessels using the waterway. Panama has declared a national emergency in response to the effects of El Nino, a phenomenon that is disrupting weather patterns worldwide and raising global temperatures.

Central America is grappling with severe drought conditions, which present significant challenges for the Panama Canal. Approximately 5% of global trade currently passes through the canal, which relies on water to power its locks for raising and lowering ships during their crossing.

In an effort to conserve water, canal authorities reduced the daily transit count from 36 to 32 on September 4. The draft budget submitted to Panama's parliament plans to lower the daily transits to an average of 29.5 from October onwards. The approved budget aims to ensure the canal's continued safe, continuous, efficient, and profitable operation.

This year's El Nino is anticipated to be the strongest since records began four decades ago. In 2023, the phenomenon led to a reduction in daily transits, decreasing them from 38 to 22. The ongoing conflict between the US and Iran has further increased traffic through the canal, as the standoff in the Strait of Hormuz restricts access to a fifth of the world's oil and gas supplies.