The Cause
Water levels of Rhine River at Kaub, Germany are set to fall so low that the river might be closed. Rhine River is a key waypoint for the shipment of commodities in Europe. The Rhine River transport disruption is causing a huge quantity of goods at risk around the continent.
The river is set to drop to 47 centimeters (18.5 inches) by the Saturday. This would take it to within 7 centimeters of being all but impassable. In addition, the impassable river could halt the flow of everything from fuel to chemicals as Europe try to prevent the current energy crisis. The 800 miles long river which runs from Switzerland to the North Sea, is vital for deliveries of heating oil, gasoline, coal and other commodities.
The effect
“With the Rhine transport disrupted and alternatives such as rail and road looking increasingly expensive, it will be difficult for Germany and Switzerland to build gasoil/diesel stocks before temperatures cool,” said Josh Folds, a European oil analyst at consultants Facts Global Energy about Rhine river transport disruption. “This is especially true given the situation with Russian gasoil/diesel imports.”
On Tuesday, the water level at Kaub fell to its lowest since 2018. It is now a little over 60 centimeters. However, according to the German Federal Waterways and Shipping Administration water level is expected to drop to 47 centimeters on this Saturday.
Commodity Barges
It’s already become uneconomical for barges carrying commodities to sail past Kaub when the level drops below 40 centimeters. This limits how much fuels barges can carry into Europe. Switzerland uses Rhine River to import oil-based fuels. However due to the disruption in the river the country is currently releasing stock from its strategic reserves.
The low levels are already disrupting trade flows, limiting how much fuel barges can carry into inland Europe. Switzerland, which uses the Rhine to import oil-based fuel, is releasing stock from its strategic reserves. Similarly some parts of inland Europe’s fuel are also effected by the Rhine River transport disruption. Australia and Hungary are releasing fuel from its inventories.
