Rhine water levels approach zero, threaten barge transport

The Rhine water levels are plummeting, threatening to halt barge transport across one of Europe's vital fuel supply routes. On September 18, the water level in Kaub, the shallowest section of the Middle Rhine, reached 20 centimeters, down from a 30-centimeter average between September 14 and 17. Experts predict the levels will hit zero by September 28 and stay at that level for at least three days, based on data from Germany's water authority WSV.

This low-water crisis is causing significant disruptions to product logistics in the region. European traders warn that without substantial rainfall, navigational restrictions could persist for an extended period. German weather forecasts indicate some rain in Rhineland-Palatinate on September 20, but mostly dry conditions on September 19 and 21.

Freight rates and logistical disruptions are contributing to unusually high refining economics. The ULSD 10ppm Northwest European Cargo flat price was assessed at $1,558.75 per metric ton on September 18, while the ULSD 10ppm Mediterranean Cargo flat price was $1,594.75 per metric ton. Historically, ULSD 10ppm NWE Cargo averaged $1,290.63 per metric ton in August and $1,169.89 per metric ton in July. The Mediterranean average price was $1,322.56 per metric ton in August and $1,194.79 per metric ton in July.

Market participants report that barge loadings are constrained due to low water levels, leading to increased reliance on alternative transport routes such as rail and pipeline infrastructure, which are operating at high capacity as barge loadings remain limited. Freight costs from the Amsterdam-Rotterdam-Antwerp hub to Basel, Switzerland, climbed to €215 per metric ton (approximately $287.92 per metric ton) on September 18, up from €165 on September 11, according to Spotbarge data.

While refineries along the Rhine can still clear product using product pipelines, rail, and road, these alternatives cannot entirely replace barges at normal volumes, resulting in slower and more expensive clearance. Additionally, rail options in Germany are constrained due to the closure of the right-bank Middle Rhine Line for major refurbishment between July 10 and December 12.

In Switzerland, the situation worsened as an oil refinery in Cressier halted operations due to an unspecified technical defect. The only Swiss refinery, which typically meets about 30% of the country's demand, stopped production at the beginning of September and resumed operations on September 16. The Swiss government authorized purchases from compulsory oil stocks, providing 30,000 cubic meters of gasoline and diesel each for withdrawal between September 8 and September 20 to support the market.