Jet fuel barge deliveries to Frankfurt: Correction

Market: Oil products
15/08/22

Corrects that barge deliveries to Frankfurt airport have been reduced, not stopped, in headline, paragraph 1,2

Jet fuel deliveries by barge to Germany's Frankfurt airport have been reduced in recent days because of extremely low water levels on the Rhine. Northwest Europe jet fuel barge trade liquidity has stalled in turn.

A limited number of barges are arriving at Frankfurt airport, German airline Lufthansa told Argus. Lufthansa has stopped sending jet fuel via barge, but some small volumes are still arriving at the airport. The dry weather has meant water levels at Kaub, a key measuring point on the Rhine north of Frankfurt, have dropped to 32cm today, within the 30-40cm range at which river operations are completely halted. But with some rainfall today and with more expected in the Rhine basin on 18 August, water levels on the river are expected to rise by a modest 10cm.

Although there are no official restrictions on navigation, some barge owners have stopped sending vessels south of Kaub.

"The last thing we now need is an accident on the river Rhine and an extension of the closure due to retrieving a barge or, even worse, a contamination," Lufthansa said, as air travel demand rises at Frankfurt. Airport operator Fraport recently expanded its 2022 outlook to 45mn-50mn passengers, from 39mn-46mn. German flight numbers lagged pre-pandemic levels by 18pc this week, Eurocontrol data show, from a 21pc lag at the start of July.

A jet fuel shortage at Frankfurt is unlikely, as it also receives fuel through the Nato and RMR pipelines, both of which are pumping jet at full capacity. As long as this continues supply will be adequate, Lufthansa said.

Other airports that receive jet fuel by barge include Zurich in Switzerland and Amsterdam in the Netherlands. Swiss strategic reserve organisation Carbura has released jet fuel from stocks to alleviate any shortage arising while Zurich airport cannot receive fuel by barge. While it is unclear what if any contingency plans are in place at Amsterdam's Schiphol airport, it is a considerable distance north of the problem area on the Rhine. It limited the number of daily passengers in August to 72,500, because of staff shortages, which may cap jet fuel demand.

Jet fuel barge trading has stalled in recent days, and barge prices have risen. No barges have been reported to Argus to have traded since 27 July, and the jet fuel barge price premium to the underlying Ice August gasoil contract has widened to $54.75/t as of 10 August, from $49/t on 27 July.

By Bea O'Kelly

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