Panama Canal Administrator Ricaurte Vásquez is warning that the coming El Niño season will last roughly eight months and is moving now to conserve water. Gatun Lake, the canal’s operational core, is already lower than it was in August 2022, ahead of the drought that produced the worst transit restrictions in the waterway’s history.

The Canal Authority will cut daily transit capacity in two steps in September, dropping from 36 vessels to 34 in early September and to 32 on September 15. Neopanamax slots fall to nine daily beginning September 3, while Panamax capacity drops to 25 and then 23. Draft restrictions have been deferred as near-term lake conditions improved: the Neopanamax cut to 48 feet moves from August 26 to September 2, and the further reduction to 47.5 feet slides from September 3 to October 1.

Demand is compounding the pressure. Vessels arriving without reservations now wait 8.5 days, and back-to-back record slot auctions have followed a surge in unreserved arrivals. Some LPG exporters are turning to ship-to-ship transfers and narrower Panamax tankers to avoid the queue. The ACP’s $1.6 billion Río Indio Reservoir project has slipped six to eight months as geological findings differ from expectations.

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