OXFORD, Britain (Reuters) - Europe may need to ration energy supplies in what is shaping up to be a “really tough” winter due to declining natural gas supply as Russia restricts flows, Shell CEO Ben van Beurden said on Thursday.
European nations have scrambled in recent months to fill winter natural gas storage with the European Commission mandating storage reach at least 80% by November 1.
As a result, the prices of natural gas, used for heavy industry and heating, have shot up, weighing heavily 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, Europe will need to ration its energy consumption, he added.
Some countries have said in the case of an extreme shortage they would curb supply to industry and prioritize supply to heat homes.
Europe’s stocks are currently 62.6% full and analysts have warned meeting the 80% target will be incredibly difficult if significant disruptions to Russian gas supply continues.
Moody’s on Wednesday warned that Germany and Italy would be forced into gas rationing if flows do not restart through the Nord Stream pipeline following an end to maintenance scheduled for July 21.
There are concerns the maintenance will not end on time, with the Italian and Germany governments warning it could be used a pretext by Moscow to keep sending less gas to Europe.