El Niño drought tightens the Panama Canal, pushing up shipping costs
Panama Canal authorities will cap daily transits at 34 vessels (dropping to 32 after Sept. 15) due to drought driven by El Niño, reducing rainfall and canal depth. The restriction tightens a crucial chokepoint that moves about 5% of global sea trade, triggering a bidding surge for transit slots (a record $5.3 million for one passage) and likely higher freight rates. The Hormuz crisis is pushing more cargo to the Americas, including a surge in US crude exports and LPG shipments, with analysts warning routes may shift around the Cape of Good Hope over the next 6–9 months as shippers adapt to higher costs and tighter capacity.