Panama Canal to reduce shipping due to El Niño-fueled drought

The Panama Canal Authority is cutting daily ship transits to 34 on September 4, 2026, and to 32 on September 15, 2026, due to severe drought. Rainfall in the canal's watershed is 34% below average, depleting the lakes that feed the locks and supply drinking water to half of Panama's 4.2 million residents. This crisis coincides with a UK Met Office forecast that the 2026 El Niño will be the strongest in over a century, potentially pushing global temperatures in 2027 past 2024's record. The transit cuts are driving up shipping costs, with one supertanker paying a record $4.6 million auction fee to bypass the queue, compounding global trade pressures already strained by conflicts disrupting the Suez Canal and Strait of Hormuz.

Panama Canal transit restrictions

• ▪The Panama Canal Authority will limit daily transits through the larger Neopanamax locks to nine slots, while the older Panamax locks will be restricted to 25 transits and eventually 23 transits
• ▪The Panama Canal Authority announced it will reduce the number of daily vessel transits through the Panama Canal to 34 starting September 4, 2026, and further down to 32 starting September 15, 2026
• ▪The Panama Canal Authority is delaying scheduled draft-limit cuts, pushing a Neopanamax maximum draft reduction of 14.63 meters to September 2, 2026, and a further cut to 14.48 meters to October 1, 2026

El Niño-driven drought conditions

• ▪Rainfall in the Panama Canal's watershed from May through August 2026 ran 34% below the historical average, while water inflows to the Gatun and Alajuela lakes were 44% below normal
• ▪The artificial lakes feeding the Panama Canal also supply drinking water for approximately half of Panama's population of 4.2 million people
• ▪The government of Honduras placed 80% of the country on a drought alert on August 19, 2026 due to the effects of El Niño

Record-strength El Niño forecast

• ▪The Climate Brink dashboard showed the 2026 El Niño on course to peak at a 3.9°C anomaly in November 2026, with Pacific sea-surface temperatures already running 2.6°C above the 30-year average
• ▪UK Met Office scientist Nick Dunstone stated that global temperature rises driven by the record El Niño make 2027 very likely to replace 2024 as the warmest year on record
• ▪The UK Met Office predicted that the 2026 El Niño will be the strongest in over a century, with tropical Pacific sea surface temperatures expected to peak at more than 3°C above normal

Global maritime trade disruption

• ▪Global shipping is facing simultaneous pressures at three key chokepoints: the Panama Canal due to drought, and the Suez Canal and Strait of Hormuz due to conflict-related disruptions
• ▪An empty liquefied petroleum gas supertanker, the G. Arete, paid a record-high auction fee of $4.6 million to skip the transit queue at the Panama Canal in August 2026
• ▪Chevron chartered two Neopanamax tankers, the Fritzi N and the Pacific Yantai, to bypass the Panama Canal locks by receiving cargo via ship-to-ship transfers off the port of Balboa
• ▪The Panama Canal handles approximately 5% of global maritime trade and around 40% of United States container traffic

Climate change amplification effects

• ▪The UK Met Office noted that the record El Niño is adding to the existing stresses of climate change following a summer of extreme heatwaves across Europe
• ▪In 2024, global temperatures exceeded 1.5°C above pre-industrial levels, which is the limit set under international climate commitments to curb global warming

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