Low Rhine levels tighten German oil product supply

Low water levels on the river Rhine are significantly impacting oil product supply in western Germany, primarily by restricting barge deliveries from the crucial Amsterdam-Rotterdam-Antwerp (ARA) hub. The water level at the key bottleneck near Kaub has fallen below 0.3 meters, a threshold at which most barges cannot pass, thereby limiting the movement of products to inland tank farms along the Upper Rhine and Main rivers.

This scarcity is particularly acute for motor fuels, with Germany typically being a net exporter of gasoline. The Rhine restrictions are hindering the transport of necessary blending components for gasoline production, exacerbating pressure on finished product availability in inland markets. Consequently, a regional price split is emerging: sellers in western Germany are increasing prices due to scarce supply, while suppliers around the Miro refinery in Karlsruhe are lowering prices to offload trapped volumes, widening the price differentials within the country.

The impact on heating oil is somewhat mitigated by subdued demand. Traders reported a nearly 40% decrease in traded heating oil volumes in July compared to June, partly due to higher national prices curbing buying. Despite weaker spot trade, privately owned heating oil tank fill levels have seen a slight recovery, reaching a national average of 46.8% on July 30, an increase of 2.3 percentage points from a historic low on May 17. This gradual stock recovery is attributed to households adding more product to tanks than withdrawing, even as warm weather reduces consumption.