By: Staff Writer
September 4, 2026
With the Strait of Hormuz under severe strain due to the ongoing Iran War, the Panama Canal faces considerable pressure to remain a viable transhipment point as shipping and logistics companies find solutions away from the crisis in the Middle East.
From this week, the number of vessels permitted to pass through the canal per day will begin to fall because of low water levels, canal authorities say.
Growing congestion at the Panama Canal were already forcing some gas tankers into unusual journeys, from a rare detour around South America to the possible emergence of shuttling through the waterway.
Two supertankers were recently observed conducting an unusual ship-to-ship transfer off Balboa port on Panama’s Pacific Ocean coast, according to vessel-tracking data, traders and shipbrokers. The process allows one of the tankers to shuttle back and forth through the canal to ensure the steady flow of liquefied petroleum gas to Asian customers, traders said.
The Iran war has diverted more traffic through the canal, while authorities tightened restrictions on how much cargo vessels can carry along with the number of ships that can cross due to drier conditions triggered by El Niño. Waiting times for vessels that haven’t made bookings in advance to transit the waterway have grown in recent months and some operators are paying millions of dollars to jump the queue.
There are currently 14 ships waiting near the canal without reservations, while there’s a total of 115 scheduled to transit, a canal spokesperson said Friday. Of the 14 vessels without bookings, those seeking northbound passage face a maximum wait of 8 days, while those looking to go south have to wait as long as four days, the spokesperson said.
Meanwhile, despite the arrival of the rainy season in Panama and the water-saving measures implemented by the Panama Canal Authority, lower-than-expected rainfall in the Canal watershed continues to affect water levels and transit capacity. As a result, the ACP has introduced additional restrictions, including draft limitations, a reduction in the number of daily transits, and adjustments to the availability of auction slots.
The ACP has noted that weather conditions are evolving more rapidly than anticipated and has indicated that it will provide advance notice of any further operational adjustments where possible.
At the end of June, Panama Canal administrator Ricaurte Vasquez Morales said 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 also said the canal’s total vessel tonnage was 7.2 percent higher during the same period.
With Gulf producers unable to export as much oil through the Strait of Hormuz as they did before the war – about 20 million barrels of oil per day (bpd) – countries are increasingly turning to North and South America to make up supplies, driving more traffic towards the Panama Canal.
The effect has been particularly pronounced for crude oil exports from the United States, which 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 about 450 million barrels in total, or an average of about 5 million bpd.
Brazil, Argentina and Guyana have all posted record shipments of oil so far in 2026.