Low Rhine strains Swiss diesel supply as importers turn to compulsory stocks

Extremely low Rhine water levels have tightened refined product supplies into Switzerland, forcing importers to increasingly rely on alternative transport routes and compulsory diesel stocks as barge movements remain heavily restricted, according to market participants.

Barge supplies to the landlocked country have fallen to paltry levels, with one Swiss diesel and gasoil distributor reporting that, while normally Rhine barges would account for 40% of their product supply, the share had fallen to between 3-4% under current conditions.

"There is no product coming in from ARA or German refineries and depots at Gelsenkirchen and Bottrop," the source said, adding that barges were also having to limit loadings to 400-600 mt due to low water levels. A German source reported that even higher up the Rhine, barges were still limited to between 600 to 700 mt. Under normal conditions, barges carry around 2,500 mt.

Falling barge loads and limited journeys have forced freight rates to new highs, putting further strain on the limited supply coming in as buyers foot rocketing costs in the FOB traded market.

To face falling barge inflows, importers have increasingly turned to rail and pipeline deliveries from nearby refineries and compulsory stock releases.

The first Swiss-based source reported that they were still taking product from the Miro Refinery in Karlsruhe, south Germany and volumes were coming from the release of 45,000 cubic meters of diesel from Swiss compulsory stocks, which began Oct. 23.

A second Swiss diesel supplier described stocks as extremely low due to the steep structure of the diesel forward market.

Platts assessed the ICE low sulfur gasoil futures prompt spread at $61.50/mt Oct. 27, over three times wider than the same contract last year.

"There aren't any products in tanks," the second source said. "No one will hold stocks."

Supplies from the Cressier Refinery in Switzerland were also being used to make up for the shortfall but faced disruptions as flooding in the south of France damaged crude pumps that supply the refinery and the processing faced desulfurization problems.

"Everybody is just trying to keep the retail stations [supplied]," the second source said.

Meanwhile, sources reported that the German market, which also takes a large part of its imports through the Rhine corridor, had been comparatively less affected due to its larger refining base and better access to alternative supplies.

"German supply is actually OK," a third German-based source said. "We have the release of EVB stocks, cargo imports and northern refinery production. There is, however, a worse situation in the south. Bessen is very difficult at the moment."

So far high prices have weighted on consumption for diesel, with flat prices FOB ARA assessed on average around $1483.35/mt, according to Platts data. However, 50ppm gasoil, used as a heating oil in Germany and Switzerland, are likely to seeing growing demand on the approach to winter.

"Heating oil [demand] is coming," the third source said. "Demand is better than 10ppm."

Platts, part of S&P Global Energy, assessed the 50ppm gasoil FOB ARA barge flat price Oct. 27, at $1,446/mt, and at $16.75/mt discount to the front-month ICE LSGO futures contract, 50 cents lower than the previous day's assessment.

For comparison, the flat price of 50 ppm gasoil barges remains above $745.75/mt seen on Feb. 27, the day before the Middle East war started, and much higher than a year ago, on Oct. 27, 2025, when it was assessed at $740.50/mt