Congestion at the Panama Canal is worsening as increased energy vessel traffic coincides with preparations for tighter draught restrictions linked to low water levels.

Industry sources cited in the report estimated that about 112 vessels were waiting to enter the canal. Container shipping customers have been warned of further disruption as more oil-related transits use the waterway amid the continuing conflict in the Middle East and uncertainty surrounding the Strait of Hormuz.

The US Gulf Coast is being considered as an alternative loading region, contributing to additional demand for canal passages. One source said eastbound transit delays could reach as much as 10 days, while conditions affecting traffic connected with the US west coast could also deteriorate.

The disruption is extending beyond vessels waiting at the canal. A freight forwarder said prolonged congestion was affecting vessel rotations, weakening schedule reliability and putting pressure on equipment availability across the region. Continued delays could prompt carriers to revise schedules or capacity, potentially adding pressure to freight rates and wider shipping networks.

Operators seeking to avoid the standard queue can bid for priority passage slots offered by the Panama Canal Authority. Between three and five such slots are made available for auction each day. Before the Iran war, prices for these slots reportedly reached between $135,000 and $140,000. By March, the average had risen to approximately $385,000.

The report also cited exceptionally high individual bids as operators sought faster passage. One carrier was said to have paid more than $4.6 million to move an empty oil tanker ahead in the queue, exceeding a payment of $4 million made only days earlier.

Congestion is now combining with concerns over the approaching El Niño season. Forecasters cited in the report assessed an 81% probability that this year's event would be very strong, with the conditions expected to continue into early spring. Strong El Niño events are associated with lower water levels, creating additional operational challenges for the canal.

As part of preparations under way since December, the Panama Canal Authority plans to reduce the maximum permitted draught for neo-panamax vessels. The limit is scheduled to fall first to 48 feet on 26 August and then to 47.5 feet on 3 September.

The tighter draught limits could constrain vessel loading while existing queues continue to disrupt transit planning. The combination of higher energy vessel demand, costly priority auctions and reduced water availability is increasing uncertainty for container and energy shipping through the strategic waterway.