Panama Canal imposes first 2026 transit restriction as drought drains water supplies

The Panama Canal has imposed its first transit restriction since the 2023 water crisis, cutting the number of ships allowed through each day as drought tightens pressure on the freshwater system that keeps the waterway operating.

From Thursday, the canal will permit 34 daily transits, down from an average of 36. Nine slots will be available for neopanamax vessels, compared with the usual 10, while the older panamax locks will handle 25 ships instead of 26. The daily total will drop again to 32 on Sept. 15, when panamax slots fall to 23.

The canal's watershed recorded a 34% rainfall deficit between May and August, according to official data. Gatún Lake, created in 1913, and Alhajuela Lake, created in 1935, supply the canal with freshwater. They also provide water for half of Panama's population, which exceeds four million people.

The canal has already begun reducing the permitted draft for ships using the expanded locks. A 48-foot limit took effect Wednesday, followed by a planned reduction to 47.5 feet on Oct. 1. Canal administrator-designate Ilya Espino de Marotta has said the draft could reach 44 feet during the Panamanian summer, compared with a maximum operating level of 50 feet.

The authority also temporarily changed its reservation system on Aug. 30 to provide more flexibility in assigning daily slots. Prices at auctions for vessels arriving without reservations have climbed above $5 million, compared with an average of $55,000 at the start of the year. The canal carries between 3% and 5% of global trade, while officials warn that a strong El Niño could worsen water conditions through the January-to-April seasonal summer.