Drought Limits Panama Canal Traffic

The Panama Canal Authority plans to reduce the number of transit ships once again starting October 2026, due to severe drought caused by the El Niño phenomenon, which has impacted the water resources needed to operate the canal. The canal temporarily halted transit operations from 36 to 32 ships daily, and now aims to reduce this further to an average of 29.5 ships per day to preserve water sustainability and ensure safe, efficient, and profitable operations. This decision comes amidst pressures from global trade, which accounts for 5% of traffic passing through the canal. Projections indicate that this El Niño event will be the most intense in four decades, an impact that affected transit operations last year as well, especially amid tensions around the Strait of Hormuz, through which about one-fifth of global oil and gas trade passes.

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