Panama Canal cuts daily ship slots as low water hits amid Hormuz disruption
The Panama Canal will reduce the number of vessels allowed each day, dropping from 40 to 34 now and to 32 later, because of falling water levels linked to El Niño.
Starting Thursday, the Panama Canal will allow only 34 ships per day, with a further reduction to 32 on September 15, as the Panama Canal Authority responds to declining water levels caused by El Niño. Rainfall from May to August is down 34% compared with historical averages, prompting additional conservation steps such as lowering the maximum draft for large vessels. The canal handles roughly 5% of worldwide maritime trade, with cargo value of $270 billion in 2024 and a growing share of U.S. container traffic.
Traffic has risen 5.2% year-on-year, spurred by more container ships and LPG carriers, while the Hormuz crisis has redirected oil flows from the Gulf to the canal route. U.S. crude exports jumped 46% year-on-year in Q2 2026, and Brazil, Argentina and Guyana have set export records, increasing demand for canal slots. Auction prices for transit rights have tripled, with a South Korean vessel paying a record $5.3 million on September 1, and analysts warn that higher costs and possible rerouting around the Cape of Good Hope could lift freight rates.
Why it matters
Reduced canal capacity raises shipping costs and may force longer routes, affecting global trade and consumer prices.
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