Panama Canal May Slash Ship Traffic Further as Powerful El Niño Intensifies

COLOMBO (News 1st); Panama could impose further restrictions on ship traffic through the Panama Canal as a strengthening El Niño raises concerns over worsening drought conditions and declining water levels at one of the world's most important maritime trade routes.

The warning was issued by newly appointed Panama Canal Authority Administrator Ilya Espino de Marotta, who assumed office this week amid growing concerns over the impact of El Niño on the country's water resources.

The development comes after the Panamanian Government declared a nationwide state of emergency on August 26 due to El Niño-related conditions.

The Panama Canal, which facilitates approximately five percent of global maritime trade, has already begun reducing the number of vessels permitted to transit the waterway each day. The daily limit was reduced from 36 vessels to 34 on September 4, while a further reduction to 32 vessels is scheduled to take effect on September 15.

Espino warned that if drought conditions persist, additional restrictions could be implemented in the coming months, with daily vessel transits potentially falling to around 29 by February or March. She noted that rainfall during September, October and November will be a critical factor in determining whether further reductions become necessary.

Although the current restrictions are not expected to reach the severe levels experienced during the 2023-2024 drought, when daily crossings fell as low as 22 vessels, authorities remain concerned about the continued impact of dry weather on canal operations.

The Panama Canal relies heavily on freshwater from Gatun and Alajuela lakes to operate its lock system, which raises and lowers ships between the Atlantic and Pacific Oceans. Each vessel transit requires roughly 200 million litres of water, making the canal highly vulnerable to prolonged periods of reduced rainfall. Water levels in both reservoirs have already declined following the onset of El Niño conditions.

In addition to limiting the number of daily transits, canal authorities have also reduced the maximum vessel draft from 15.2 metres to 14.6 metres, requiring some ships to carry lighter loads in order to pass through the waterway safely.

The disruption comes at a particularly sensitive time for global shipping, with the canal's strategic importance increasing as traffic through the Strait of Hormuz has declined amid tensions in the Middle East. Reports indicate that some shipping operators have paid more than one million dollars at auction to secure passage slots through the canal.

To address long-term water security concerns, Panama is investing in the development of a new reservoir on the Rio Indio River. The project is expected to support canal operations and provide water to more than half of Panama's population for the next five decades, although construction is expected to take between five and six years.

With meteorologists predicting that the current El Niño could become one of the strongest on record, authorities are closely monitoring weather patterns as global shipping companies watch developments at a waterway that remains critical to international trade and supply chains.

Sources: Al Jazeera / Gcaptain / Macau Business