Cost of Moving Fuel to Upper Rhine Rises by Most Since February

Date: Wednesday, July 12, 2023
Source: Bloomberg

The cost of moving diesel from Rotterdam’s oil-trading hub to a key point on the Upper Rhine rose the most since February, as low water levels restrict volumes barges are able to carry.

Transporting diesel to Karlsruhe, Germany, cost 11% more as of Monday, according to data compiled by Insights Global, with the trip from Rotterdam quoted at 46 euros ($50.66) a ton.

Europe’s busiest commercial waterway is being closely watched for a potential repeat of last summer, when record temperatures meant water levels dropped to a level that rendered the Rhine effectively unnavigable. As well as moving fuels like diesel and heating oil inland, the Rhine also handles coal, chemicals and metals.

Germany’s national forecaster warned of “extreme heat stress” on the Upper Rhine from late morning on Tuesday, raising the risk of disruptions to river traffic.

As water levels drop, so does the volume of goods barges are able to carry. Vessels passing a narrow point of the river on the journey inland to south Germany and Switzerland can now only load about as much as 1,150 tons, down from 1,200 tons at the end of June, according to a note from Riverlake Barging.

The barge clearance level is forecast to dip below 1 meter (3.3 feet) at Kaub, a chokepoint on that stretch, by Wednesday, according to a forecast from Germany’s Federal Waterways Administration. At 40 cm or below, navigating the Rhine reaches a level considered to be uneconomically for most freight ships.

The Miro refinery, one of Germany’s biggest oil-processing plants, is located in Karlsruhe. It typically ships gasoline to the Antwerp-Rotterdam-Amsterdam hub. Rates for gasoline also increased.


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