Panama Canal and fuel pressure

A new El Niño watch is putting the Panama Canal back under pressure just as fuel costs and a dispute with China are already raising shipping risks. (cpc.ncep.noaa.gov) The National Oceanic and Atmospheric Administration said on April 9 that El Niño is likely to emerge in May through July 2026 with a 61 percent chance and persist through at least the end of 2026. The Journal of Commerce reported on April 10 that carriers are again watching the canal for weather-related disruption by year-end. (cpc.ncep.noaa.gov) (joc.com) The canal runs on fresh water stored in Gatun Lake, and the last El Niño-driven drought pushed the lake to the third-lowest level on record, according to the Journal of Commerce. During that drought, transit limits fell to as few as 24 ships a day, down from the usual mid-30s, according to reporting that cited canal restrictions. (joc.com) (professionalmariner.com) That matters because the Panama Canal handles about 5 percent of world trade and connects more than 160 countries and roughly 1,700 ports, according to the Panama Canal Authority. More than 70 percent of the cargo moving through it starts or ends in the United States. (pancanal.com) Panama is also trying to cool a separate shipping fight with China. President José Raúl Mulino said on April 10 that Panama was “not interested” in having a problem with China after a rise in inspections of Panama-flagged vessels in Chinese ports. (bairdmaritime.com) Mulino said the inspections were not necessarily political retaliation and said Panama was still assessing them. His foreign minister had taken a harder line a day earlier, linking the uptick to Panama’s Supreme Court ruling in late January against the legal framework behind CK Hutchison’s 1997 port concession at Balboa and Cristobal. (bairdmaritime.com) In Washington, Federal Maritime Commission Chair Laura DiBella said China’s detentions of Panama-flagged vessels in Chinese ports had surged “far exceeding historical norms.” She said the inspections appeared intended to punish Panama after the transfer of Hutchison’s port assets, though she noted she was speaking in her own capacity. (fmc.gov) Higher fuel prices are adding another cost layer before any new canal restrictions even arrive. The U.S. Energy Information Administration said the national average on-highway diesel price rose to $5.643 a gallon on April 6, up 24.2 cents from a week earlier. (eia.gov) The March Consumer Price Index, released April 10, showed a 0.9 percent monthly rise in overall consumer prices, with gasoline singled out in the Bureau of Labor Statistics release. That is the channel through which shipping and trucking costs can move from ports and highways into household inflation. (bls.gov) For now, the canal is still operating and Panama’s president is urging calm. But the next few months will test whether weather, geopolitics and fuel can stay separate problems instead of becoming one freight bill. (pancanal.com) (bairdmaritime.com)