Impacts of El Niño Return on Panama Canal and Global Trade

The El Niño phenomenon threatens the flow of the Panama Canal, which relies on two freshwater reservoirs to operate. Rising ocean temperatures in the Pacific reduce rainfall and cause water levels to drop. This could restrict shipping traffic and decrease the number of transit operations, as has happened in the past, damaging global shipping and increasing costs. The authorities are considering building a new reservoir to improve water supplies, amid expectations that the upcoming El Niño will be the most intense during autumn and winter, jeopardizing the normal operation of the canal and impacting global trade.

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