Major Petroleum Corridor At Risk Of Closure Due To Low Water Levels

Europe’s supply of fuels such as coal and petroleum products faces further disruptions in the coming days as the water levels on the Rhine River—a key waterway for barge transportation – are expected to sink below the level of navigability. 

The Rhine River, which runs northwest from Switzerland through Germany, France, and the Netherlands into the North Sea, is a major petroleum product transportation corridor in Europe. Due to heat waves and drought this summer in Europe, the levels on the river are low and have now become too shallow for many barges shipping petroleum products to pass. Barges are not being fully loaded to keep them lighter on the water, which lifts shipping costs and delays shipments of coal and fuels, affecting power generation in Germany during the heat wave.  

The water level at the Kaub waypoint in Germany is now set to drop below the 40 centimeters (15.75 inches) threshold of navigability, Bloomberg reported on Friday, citing German government data. The water level is expected to drop further in the next few days.

Some of the goods transportation has to be rerouted through rail transport, which could create further difficulties for Europe to procure coal and fuels. The low water levels on the Rhine have already affected coal supply and contributed to record-high year-ahead power prices in Germany.  

Europe’s biggest economy, which has started to run more coal-fired power plants to conserve gas, could see reduced generation from two of its coal plants until the first week of September due to limited coal supply via the Rhine, utilities warned last week.  

This summer, the low water levels on the Rhine have already caused logistics issues with coal in Germany. Power plants in Germany are finding it increasingly difficult to source coal amid an energy crisis that is spiraling out of control as falling water levels on the Rhine River add to supply challenges caused by Russia’s war on Ukraine.  

By Tsvetana Paraskova for Oilprice.com

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