Fuel supply along the Rhine in Germany is becoming increasingly strained by persistently low water, as many barges can no longer pass the Kaub bottleneck en route to the Upper Rhine and Main. Demand is also rising as firms seek to replenish depleted stocks.
The supply situation in western Germany is particularly tight. The Rhine gauge at Kaub fell below 0.35m on 27 July, according to waterway information service Elwis. Most inland vessels can no longer pass Kaub, while transit has become uneconomic for others because cargo volumes are severely restricted, shipowners said.
Low water is also expected to affect refinery logistics along the Rhine. Sharply higher freight rates, with rates to Frankfurt and Karlsruhe hitting their highest levels since Argus began tracking them, have significantly raised the cost of delivering blending components and other feedstocks to refineries.
Moving gasoline, diesel, heating oil and by-products is also becoming harder and more expensive. Gasoline availability at many loading terminals in western Germany is already severely limited, and many suppliers have largely withdrawn from the gasoline spot market.
Buyers are increasingly sourcing from the Miro consortium's 310,000 b/d Karlsruhe refinery.
Fuel prices last week climbed to their highest since late April, the strongest levels since Germany introduced its temporary two-month energy tax cut in early May. The main driver was higher Ice gasoil futures. The front-month contract rose on 23 July to its highest since early May amid ongoing escalation in the Iran conflict.
Despite higher prices, reported diesel and gasoline spot trade volumes rose sharply compared with the previous three weeks. Traders attributed this partly to depleted inventories. Many firms built large fuel stocks at the end of June ahead of the expiry of the tax cut, curbing demand in early July. These inventories now need replenishment. Seasonal agricultural and construction activity is also boosting demand in some regions.
