According to Shell CEO Ben van Beurden, Europe may need to limit energy supplies during what is shaping up to be a “really tough” winter owing to dwindling natural gas availability as Russia cuts shipments.
European countries have been scrambling in recent months to fill winter natural gas storage, with the European Commission requiring at least 80% storage by November 1.
As a consequence, the price of natural gas, which is used in heavy industries and heating, has skyrocketed, putting a strain on consumers and governments.
“It will be a really tough winter in Europe. Some countries will fare better than others but we will all be facing a very significant escalation in energy prices,” van Beurden told the Aurora Spring Conference in Oxford.
In the worst-case scenario, Europe’s energy usage would have to be rationed, he continued.
In the event of a severe shortage, several governments have said that they would restrict supply to industry and prioritize supplies to heat households.
Europe’s stockpiles are presently 62.6 percent full, and experts warn that attaining the aim of 80 percent would be very difficult if substantial delays in Russian gas supplies persist.
Moody’s warned on Wednesday that if flows through the Nord Stream pipeline do not resume after maintenance ends on July 21, Germany and Italy would be compelled to ration gas.
There are worries that the repair will not be completed on time, with the governments of Italy and Germany warning that it might be used as an excuse by Moscow to continue supplying less gas to Europe.