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Panama Canal may cut transits further as El Nino drought deepens
The canal already lowered its daily ship cap from 36 last month to 32 by mid-September, citing reduced reservoir levels tied to El Nino.
The new administrator of the Panama Canal said the number of ships using the waterway could be reduced further as drought linked to El Nino strains water supplies, Agence France-Presse reported. Panama has declared a nationwide emergency over El Nino, which is also expected to be the strongest since record-keeping began about four decades ago.
Restrictions are coming as shippers look for alternatives to the Strait of Hormuz after Iran blocked the route in retaliation for the war launched by the United States and Israel. The Panama Canal, an interoceanic passage handling about 5 per cent of global maritime trade, has already cut its maximum daily ship limit, from 36 last month to 32 by mid-September.
The canal operates by using rainwater collected in two reservoirs, and reservoir levels have dropped since the onset of El Nino. The administrator said further transit cuts remain possible if conditions worsen, according to the report.