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The European energy crisis is worsening! Low water levels in the Rhine River force Germany’s largest oil refinery to reduce production! The depletion of water in the Rhine River undoubtedly poses a severe threat to Germany and indeed to Europe as a whole. On Monday, the water level at the Koblenz gauge on the Rhine dropped to an extremely low level of 30 centimeters; this figure is only 6 centimeters (2.4 inches) above the record low of 25 centimeters (9.9 inches) recorded in 2018. Earlier this Wednesday, traffic on the section of the Rhine River between Saint-Gohard and Oberwesel was halted due to a technical malfunction on one of the ships; fortunately, it was reopened on Thursday to allow cargo ships to pass through. Many people may still remember the \"historic disruption of shipping\" in 2018: the water level on the Rhine River dropped to a record low of 25 cm, making it difficult for many barges to pass through. The waterway was closed for about 132 days, which led to higher electricity prices in Germany and caused significant losses to German industry; Shell’s largest refinery in Germany was also severely affected. According to \"Impact of the Rhine River closure on Germany’s economy?\" According to the article, the drought in Europe this year could be more severe than that in 2018. First, the water level in the Kaub section is already lower than it was during the same period in 2018, raising the risk of low water levels persisting for longer ； Second, affected by the Russia-Ukraine conflict, Europe is already facing energy shortages, and the risk of river traffic disruptions on the Rhine could exacerbate this energy crisis. Perhaps the only good news amid the recent European energy crisis is that river levels on the Rhine may rise soon, which could improve transportation conditions. German **data show that by next Monday, August 22, the water level at Köln, an important river crossing west of Frankfurt in Germany, is expected to rise to 67 centimeters. The Rhine River Shipping Authority (WSA) issued a statement saying that thanks to the rainfall, water levels across the entire Rhine River basin will rise again in the coming days. The region referred to is the middle and lower reaches of the Rhine River. The weather forecast predicts that by next weekend, the water level will rise by about 50 centimeters, but it will drop again once the tide recedes. The Rhine River is approximately 1,230 kilometers long, of which nearly 900 kilometers are navigable. In addition, it is connected to other major rivers through a network of canals, forming a well-connected waterway system. Especially for Germany, as the Rhine River flows primarily through the country, covering a length of about 865 kilometers within German territory, it connects Germany’s industrial areas – such as the Ruhr region, Germany’s largest industrial area located upstream of the Rhine – with Rotterdam, Europe’s largest port. This is of great significance for Germany’s industry. The traditional Rhine River (from Basel in Switzerland to the German-Dutch border) carries about 31% of the EU’s inland freight traffic. In 2020, traditional Rhine River freight volume reached 160 million tons, accounting for 31.4% of the EU’s total inland waterway cargo volume that year (510 million tons). Among them, industrial raw materials (iron ore, sand and gravel) as well as energy products (coal, refined oil, etc.) all rely on transportation via the Rhine River. Josh Folds, an oil industry analyst in Europe at energy consultancy Facts Global Energy, predicts that a disruption to river transport on the Rhine will force companies to seek alternative land-based transportation methods such as rail and truck shipping, thereby increasing already soaring transportation costs. The cost of transporting some fuels to Switzerland now exceeds 200 euros per ton, the highest level in at least three years, whereas it was only 25 euros just a few months ago. The closure of the Rhine River could disrupt trade in 400,000 barrels of petroleum products per day; a significant disruption to this important supply route for gasoline/diesel from Amsterdam-Rotterdam-Anvers to inland Europe would exacerbate the energy crisis in the region. The Rhine River is the most important route for transporting petroleum products from Amsterdam-Rotterdam-Anvers to Germany and Switzerland. Last year, 240,000 barrels of oil were transported by barge to Germany for unloading each day, while 50,000 barrels of gasoline/diesel, jet fuel/kerosene, and gasoline were shipped upstream to Switzerland for unloading near Basel. Oil pipelines and railways are alternatives to waterways, but they cannot provide additional capacity, and shortages of fuel and labor fail to alleviate the problems caused by disruptions to the Rhine shipping route. Due to low water levels in the Rhine River, Shell has cut production at its refinery in Rhineland, Germany. This refinery, located on the banks of the Rhine, is Germany’s largest oil processing plant. Currently, low water levels are preventing the supply of diesel and heating oil from the Port of Rotterdam to warehouses and customers along the Rhine River. Shell said that it is not only the Rhine region that has a high demand for heating oil; the supply situation is challenging, but it is being managed properly. Shell’s move undoubtedly highlights the severity of logistics disruptions caused by low water levels in Europe’s most important commercial waterways. 31% of Germany’s oil and coal relies on inland water transport, with the Rhine River accounting for 80% of such transport volume. The integrated facilities in the Rhine region consist of the Godorf and Wesseling plants, whose combined crude oil processing capacity is just over 320,000 barrels per day. Among them, Godorf recently experienced a production disruption caused by a power outage. Reportedly, the refinery’s capacity ranks second only to Shell Pernis in Rotterdam, which processes 400,000 barrels per day and is Europe’s largest refinery. Disrupted shipping has caused large amounts of fuel to be trapped in rivers, preventing it from reaching power plants and leading to soaring electricity prices in Germany. As mentioned in an earlier article by Wall Street Insights, electricity prices in Germany have risen by 5.8%, reaching a record level of 541 euros, with an increase of over 500% over the past 12 months. The shortage of water and electricity is spreading from commercial areas to workplaces, recreational centers, and residential homes; Germany has begun to limit the supply of hot water, implement rationing systems, dim street lights, and close swimming pools. The German parliament previously passed a brand-new regulation that could lead to even higher costs. This will allow the federal government to impose an emergency tax on all customers, in order to distribute the higher costs more evenly. The plan aims to prevent fuel importers from going bankrupt; ministers fear this could trigger a Lehman Brothers-style crisis in the entire industry in 2008. German energy giant Uniper is in talks with *** officials regarding a **rescue plan. Experts say the amount of aid could reach as much as 9 billion euros. In June, German Economics Minister Robert Habeck launched the second phase of the country’s fuel emergency plan, taking an important step in terms of fuel rationing; he also called on residents to use less electricity, and municipal authorities as well as property owners complied with this decision. In July, Germany’s largest real estate company, Vonovia, said it might lower the temperature of tenants’ central heating systems to 17 degrees between 11 p.m. and 6 a.m., which would save 8% on heating costs. Another housing cooperative in the German city of Saxony has taken further action, stating that it will limit the supply of hot water to tenants, allowing hot showers only between 4–8 a.m. and 11 p.m.–1 a.m.