New Panama Canal chief considers more cuts in transits due to El Nino
The Panama Canal Authority is considering further transit restrictions due to severe drought conditions caused by the El Nino weather pattern. These measures are necessary to manage reservoir levels, which are critical for operating the canal's lock system.
Why it matters
As a vital artery for 5% of global maritime trade, disruptions to the Panama Canal can significantly impact global supply chains and shipping costs.
The number of ships sailing through the Panama Canal could be cut further due to drought caused by the El Nino weather pattern, the new administrator of the waterway said on Monday.
Panama has declared a nationwide emergency over El Nino, a phenomenon developing over the Pacific Ocean that is affecting worldwide weather patterns and pushing up global temperatures.
This year’s El Nino is expected to be the strongest since record-keeping began four decades ago.
Panama’s restrictions come even as use of the canal has risen: shippers are seeking an alternative to the Strait of Hormuz, which Iran has blocked in retaliation for the war launched by the United States and Israel.
The interoceanic Panama Canal – which handles 5 per cent of global maritime trade – has already reduced the maximum number of ships allowed through daily, from 36 last month to 32 by mid-September.
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