No Rain in Panama Means More Pain in LNG
A drought caused by climate change is forcing the Panama Canal to constrain traffic, slowing existing transit from the Gulf Coast while creating new opportunities for Pacific port projects.
Shallow drafts only, please.
Photographer: Luis Acosta/AFP via Getty Images
The global energy market is defined by chokepoints, those tight squeezes on the map that can cause havoc on the whims of the gods or mere politicians. The Suez Canal is a good example of both, scene of the 1956 geopolitical crisis that shook the world and also the more recent grounding of a container ship that shook social media (and global trade).
Another canal is currently not quite choking but beginning to splutter. The Panama Canal is suffering from an “unprecedented drought,” according to the canal operator. The implications for energy markets, natural gas in particular, could be far-reaching, slowing existing routes while also creating opportunities for new ones.