The majority of the actual water path from one side to the other goes through Gatun Lake (freshwater), which is above sea level. The canal doesn’t go through the continent so much as over it. The locks and canal trenches were placed to take advantage of existing inland waterways as much as possible. The drought is a problem because the level of water in the lake is low enough that it isn’t filling the canal properly.
The Panama Canal isn’t a straight level trench from one coast to the other.
The majority of the actual water path from one side to the other goes through Gatun Lake (freshwater), which is above sea level. The canal doesn’t go through the continent so much as over it. The locks and canal trenches were placed to take advantage of existing inland waterways as much as possible. The drought is a problem because the level of water in the lake is low enough that it isn’t filling the canal properly.