Another supply chain crisis brewing in Europe

A section of Europe's most important inland waterway for transporting fuel and other industrial goods has fallen to levels not seen in three decades for this time of the year and might be an ominous sign of incoming supply chain disruptions on the inflation-battered continent if hot weather and dryness persist through summer.

The Rhine Waterways and Shipping Authority (WSA) has yet to issue any alerts for the Rhine River, but data from the closely watched Kaub chokepoint shows the water level around 1.26 metres on June 28, OilPrice.com reports.

On a seasonal basis, Kaub water levels haven't been this low in three decades, indicating that barge disruption could be ahead for the second year. 

Already, barges hauling heating oil fuel from the Rotterdam area beyond Kaub have seen cargo loads nearly halved from 2,000 tons of fuel to 1,200 tons in a week, according to Riverlake Barging data. 

Declining Kaub water levels have begun to push up barge prices. 

If Rhine supply chain woes materialize later this summer, then this will be bad news for the European Central Bank's fight against inflation. At the same time, the continent entered a recession earlier this year.