Cargo Record Set: Panama Canal Profits Amid Hormuz Closure Despite El Niño

The Panama Canal handled a record volume of cargo, driven by the closure of the Strait of Hormuz in the Middle East, despite traffic restrictions caused by El Niño drought conditions, according to the canal’s administrator and official figures released Wednesday. The waterway, which carries 5% of global maritime trade, handled 521 million metric tons of cargo aboard nearly 14,000 ships during the fiscal year that ended September 30, according to the Panama Canal Authority (ACP).

The previous record was set in 2022, when 518 million metric tons passed through the canal. In a statement, the ACP also reported total revenue of $6.6 billion from canal operations, a 16% increase over the previous fiscal year. Canal administrator Ilya Espino de Marotta told AFP that the increase in cargo reflected a surge in ship traffic following the closure of Hormuz, while El Niño affected operations only toward the end of the fiscal year.

Before conflict erupted in the Middle East in February, 20% of the world’s oil and liquefied natural gas passed through the Strait of Hormuz. The canal temporarily increased its daily ship allowance from 36 to 41 to provide an alternative route for energy shipments, Espino de Marotta said.

That increase helped offset subsequent restrictions imposed as a lack of rainfall lowered water levels in the two artificial lakes that supply the fresh water needed to operate the canal. In early September, the canal reduced daily transits to 32, later raising the number to 33. El Niño’s impact was felt only during the final four months of the fiscal year, Espino de Marotta said.

Despite the severe climate conditions, “we have been able to support the industry when it needed us by bringing more cargo through the canal,” she added. The 80-kilometer (50-mile) waterway primarily connects routes from China, Japan and South Korea with the U.S. East Coast. The United States is its largest user.

Its main cargo categories include containers, liquefied petroleum gas, vehicles, grain and liquefied natural gas, the segment that has grown the most in recent months.