Low Rhine water levels in recent weeks have disrupted flows of oil products to inland markets such as Germany or Switzerland putting domestic stocks under pressure, but traders said the situation in Germany was not critical as the country was using alternative ways to bring product in.
Rhine water levels, still under 80 cm Friday in Kaub, southwest Germany, have forced operators to minimize barge loadings and triggered a surge in freight rates.
"In inland Germany stocks are low obviously due to high barge rates because of Rhine water levels," a trader said. "For instance if you could carry 1,500 mt with one barge before, now you [have to] carry the same volume with three barges. So once the Rhine opens, Germany will take a lot of volume."
"[But the situation is] not really critical as people are still taking barges," the trader added.
Germany is also using alternative ways to bring distillates inland and compensate for the lack of tonnage moving on the Rhine.
German diesel importers have ramped up purchases by cargoes over recent weeks, pulling larger volumes from Russia into the ports of Bremen, Hamburg and Rostock before transferring the volumes on to trains heading for inland destinations.
"A lot of volume is coming through Hamburg to replace volumes not coming down the Rhine, the RMR pipeline is doing the rest pumping diesel to Germany," a trader said.
As a result, traders said Germany was unlikely to tap into its emergency stocks, unlike its neighbor Switzerland. Switzerland said this week it would release 50,000 cu m of diesel and 40,000 cu m of gasoline following the unexpected shutdown of its last operating refinery, Cressier, combined with thin barge flows.
