Booking slots will be cut to 25 per day starting Nov. 3 from an already reduced 31 per day, the Panama Canal Authority (ACP) said in a client advisory, and will be gradually reduced further over the next three months to 18 slots from Feb. 1.
In recent months, the ACP has imposed various passage restrictions to conserve scarce water, including cutting vessel draft and daily passage authorizations.
Water levels in Gatun Lake, the rainfall-fed principal reservoir that floats ships through the Panama Canal's lock system, have "continued to decline to unprecedented levels for this time of year," the ACP said.
"The recorded precipitation for October has been the lowest on record since 1950 (41% below), and so far, 2023 ranks as the second driest year for the same period," the authority said.
A naturally occurring El Nino climate pattern associated with warmer-than-usual water in the central and eastern tropical Pacific Ocean is contributing to Panama's drought.
Comment: There's also this: A warning from ancient tree rings: The Americas are prone to catastrophic, simultaneous droughts
The late arrival of this year's rains and the lack of precipitation in the Canal watershed had forced the canal authority to reduce average daily transit capacity slightly to 32 vessels per day since July 30.
The existing restrictions have resulted in long delays, with tens of vessels waiting to transit the canal.
An analyst note from the U.S. Energy Information Administration stressed that delays at the canal "have pushed shipping rates higher elsewhere by decreasing the globally available number of vessels."
It also said delays for some gas transporters were at record highs in Panama, pushing up the cost of shipping liquefied gas from the U.S.
Comment: This issue has been known about since August, but, rather than find a solution, the West is instead spending its time and money fomenting another, albeit even more ominous, conflict in the Middle East
Lest we forget that Europe, for its part in sabotaging the Nord Stream pipeline, has already cut itself off from one major source of gas, making itself even more reliant on the already exhorbitant and unreliable US LNG; and which will likely become even more expensive with the Panama Canal operating a reduced service.
Moreover, if a major conflict breaks out in the Middle East, as is looking likely, disruption at the Suez Canal will mean yet another major trade route suffering restricted services. And, it's unlikely that Russia, nor the majority of Arab nations - and Qatar is major LNG supplier - will be eager to supply the West with gas if they are responsible for a serious outbreak of violence in the region.
Meanwhile, for the Northern Hemisphere, winter is coming: