Rhine drought hits oil supply amid cold snap

Bloomberg

Germany’s industrial southwest, Switzerland and parts of France face a dearth of fuel supplies in the coming weeks just as freezing temperatures threaten to lift demand for heating oil.
A prolonged drought this summer has led to record-low water levels on the Rhine river, closing many parts of the key transport artery to barge traffic. With little relief in sight, the German government is seeking to loosen rules on fuel transports by road to prevent shortages.
The logistics bottleneck led to production halts at Covestro AG, contributing to a profit shortfall at the German plastics maker and sending the shares tumbling.
“Some petrol stations are empty,” said Herbert Rabl, a spokesman for Tankstellen-Interessenverband, an association representing German fuel station operators. “The problem is the logistics, and it is quite big.”
In normal market conditions, upwards of 100,000 tonnes a week of diesel-like fuels flow up the Rhine from Rotterdam. Gasoline also moves in the opposite direction when the waterway is functioning without restrictions. Water levels in the Rhine basin, which have been well-below average since July, will continue to fall or remain unchanged with little significant rainfall forecast in the next few days, according to Germany’s waterway administration.
High pressure forecast over northern and central Europe will act to block rain this month, and there’s a chance that those weather conditions could continue into December, according to Giacomo Masato, an analyst and meteorologist at Marex Spectron Group Ltd in London.
The situation in Switzerland, which relies on Europe’s busiest waterway for two-thirds of its diesel supplies and a quarter of its gasoline deliveries, has become “tense,” according to the nation’s EV-UP oil federation.