Panama Canal restricts traffic amid Hormuz crisis: Why this matters

By Al Jazeera Staff and AFP. Published On 3 Sep 20263 Sep 2026.

Key points

• Some $270bn of cargo passed through the canal in 2024, according to research by Al Jazeera.
• One South Korean ship paid a record $5.3m to pass through the canal on September 1, according to Bloomberg News.
• Brazil, Argentina and Guyana have all posted record shipments of oil so far in 2026.
• From Thursday, only 34 vessels will be permitted to sail daily through the canal.
• The effect has been particularly pronounced for crude oil exports from the United States.

While shipping remains severely disrupted in the Strait of Hormuz, shippers are facing new constraints at another strategic maritime chokepoint on the other side of the world: the Panama Canal.

From this week, the number of vessels permitted to pass through the canal per day will commence to fall as of low water levels, canal authorities say.

Here's what we know regarding the latest measures at the canal. It handles some 5 percent of global maritime trade, according to the Panama Canal authority. What restrictions are being introduced in the Panama Canal?

From Thursday, only 34 vessels will be permitted to sail daily through the canal. It has traditionally been able to accommodate up to 40 per day. On September 15, the cap will drop further to 32.

Notably, the Panama Canal Authority, the body which oversees the waterway, notes the new limits are necessary as the country braces for lower water levels due to the El Nino weather phenomenon.

In the area of the canal, rainfall from May to August is down by 34 percent from its historical average, the authority remarked, adding that El Nino could cut it even more.

For context, the authority has already implemented other water conservation measures, such as lowering the maximum draft – the vessel's depth in the water – for the largest ships. How significant is the Panama Canal for world trade?

Some $270bn of cargo passed through the canal in 2024, according to research by Al Jazeera. The passageway accounted for 40 percent of all US container traffic and 2.5 percent of all global sea trade.

This year, according to the Panama Canal authority, that has risen to 5 percent of all global sea trade, with 70 percent destined for or originating in the US. Has traffic in the Panama Canal been increasing this year?

At the end of June, Panama Canal administrator Ricaurte Vasquez Morales remarked more than 10, 000 vessels had transited the canal over the previous nine months, up 5.2 percent from the same period a year earlier, driven largely by increases in container ships and liquefied petroleum gas (LPG) carriers.

He additionally stated the canal's total vessel tonnage was 7.2 percent higher during the same period. How has the Hormuz crisis contributed to this?

With Gulf producers unable to export as much oil through the Strait of Hormuz as they did before the war – regarding 20 million barrels of oil per day (bpd) – countries are increasingly turning to North and South America to produce up supplies, driving more traffic towards the Panama Canal.

Notably, the effect has been particularly pronounced for crude oil exports from the United States. It leapt by 46 percent year-on-year to a record 61.6 million metric tonnes in the second quarter of 2026, according to global trade intelligence firm Kpler – equivalent to regarding 450 million barrels in total, or an average of concerning 5 million bpd.

Brazil, Argentina and Guyana have all posted record shipments of oil so far in 2026. What impact will the new Panama restrictions have?

In practice, the rise in cargoes needing to be shipped through the canal is already creating a bidding war for transit slots in the canal.

While average auction rates for transit slots were $55, 000 between October last year and February this year, the recent surge in demand has caused those costs to jump three-fold, according to the canal's authority.

Niels Rasmussen, chief shipping analyst at the Baltic and International Maritime Council (BIMCO), an international shipping association, remarked the canal's new restrictions will put more pressure on shipping, pushing some vessels to reroute and produce longer, more costly journeys around the Cape of Good Hope in South Africa.

"Reduced cargo capacity, combined with higher auction prices for transit slots, is likely to push freight rates higher, " Rasmussen informed Al Jazeera.

As well as LPG exports from the US Gulf to Asia and the western coasts of Central and South America, could be particularly affected, he continued, container cargo moving from Asia to the US's east coast.

Taken together, the developments around panama Canal restricts traffic amid Hormuz crisis: Why this matters point to a situation that is still moving, and the coming days should bring more clarity.