Panama Canal is experiencing the worst drought in 73 years, and the dry weather has forced massive oil tankers to stop using the Canal altogether. This development means extended voyages for tankers by thousands of miles.
The Panama Canal Authority limited ship crossings over the past since the Gatun Lake, which lies atop the canal and feeds its locks below, has extremely low levels of water.
The Panama Canal will again reduce the number of booking slots to 18 by 1st Feb 2024, per reports.
Regarding transits, containerships and gas carriers mostly use the Neo-Panamax locks that became operational in 2016. Suezmax and Aframax tankers also use these locks.
Most of these huge ships are in ballast, with the owners utilising the Canal to reposition these ships in the U.S Gulf after unloading on the US West Coast, per a weekly report by broker Poten.
The report said that only a few Suezmax tankers cross the canal loaded since the drought restrictions allow them to carry just 12,000 tonnes of cargo more than the Aframax tankers.
Since booking slots will be slashed to 18 by Feb 2024, these spots will likely be taken by containerships and occasionally by gas carriers.
The report mentioned that it is very likely that tankers will not use the canal, given the drought situation.
They cannot schedule prior, like container ships and cannot compete for the auction slots, given that bids have reached quite high recently, with a new high bid of $2.85 million for a VLGC.
The steep reduction in slots will push many ships, especially tramp vessels like tankers and dry cargo ships, away from the Panama waterway.
References: Economic times, Sea trade Maritime
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