The drop in water level in the Rhine River to 20 centimeters on September 18 has raised concerns about the future of barge transportation on this vital fuel supply route in Europe. Forecasts indicate that this water level could reach zero by the end of the month, which could lead to a complete shutdown of barge transportation in the area.
Details on Water Level Status
According to published information, the water level at the shallowest point of the Rhine, namely Kaub, reached 20 centimeters on September 18. This water level had remained around 30 centimeters from September 14 to 17. Forecasts suggest that the water level will drop to zero by September 28, and this situation will persist for at least three days.
This water crisis in the Rhine has had serious negative impacts on the logistics of products in the region. Market officials have stated that upper Rhine destinations will soon approach an unofficial shutdown, as the water level in these areas is critically low.
Economic and Transportation Consequences
European traders have warned that without significant rainfall, severe navigation restrictions may continue for an extended period. Forecasts from the German Weather Service (DWD) indicate possible rainfall on September 20 in the state of Rhineland-Palatinate, but dry conditions are expected to persist on September 19 and 21.
Transportation rates and logistical disruptions have significantly impacted the refining economy. According to assessments, the loading price of ULSD 10ppm oil on September 18 in Northwestern Europe reached $1,558.75 per ton, while the price of the same product in the Mediterranean reached $1,594.75 per ton.
Another market participant stated that this disruption has increased reliance on alternative transportation routes. Rail lines and pipeline infrastructures are currently operating at maximum capacity, as barge loading has been limited due to low water levels.
Transportation costs from the Amsterdam-Rotterdam-Antwerp hub to Basel, Switzerland, reached €215 per ton (equivalent to $287.92), up from €165 on September 11.
Analysts predict that the situation for refineries along the Rhine will largely remain unchanged, as the water level returns to a critical state. The refineries in Wesseling and Karlsruhe have alternative crude oil supplies via the Rotterdam-Rhine pipeline and the Transalpine pipeline, while Gelsenkirchen can source crude oil through storage facilities connected to the pipeline nearby.
However, these alternative options cannot fully replace barges at normal volumes, leading to slower and more costly unloading processes. Additionally, rail options in Germany are limited due to the closure of the right Rhine middle rail line, which is a key transportation route in Germany.
The situation in Switzerland, where the Rhine begins, has also worsened due to the suspension of operations at the Kersier oil refinery due to an unspecified technical fault. This only Swiss refinery typically supplies about 30 percent of the country's demand and was halted in early September, resuming operations on September 16.
The Swiss government has stated that additional offerings via rail and pipeline for petroleum products from France to Geneva, which are currently heavily utilized, cannot fully and timely compensate for the production shortfall.
