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With the reduced supply of Russian gas, Europe faces a harsh winter that could include energy rationing as European countries scramble to fill natural gas storage sites before November, according to Shell’s chief executive officer, Ben van Beurden.
“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 said at the Aurora Spring Conference in Oxford on Thursday, as carried by Reuters.
There could be rationing of energy use in Europe in the worst-case scenario, Shell’s top executive added.
Russia slashed gas supply to Europe in the middle of June and is not currently sending any gas via Nord Stream as the pipeline is undergoing regular maintenance until July 21. The EU and its major importers of Russian gas are concerned that Gazprom will not resume flows through Nord Stream once the maintenance period is over, or could further slash supplies.
Europe is scouring the world for non-Russian gas, importing record volumes of U.S. LNG, and signing deals with North African gas suppliers to boost deliveries. Still, the EU could struggle to fill its gas storage to 80% by November 1, per the new EU recommendations after the Russian invasion of Ukraine.
As of July 13, gas storage in the EU was 62.6% full, according to data from Gas Infrastructure Europe.
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Shell’s van Beurden isn’t the first industry official to warn of energy rationing in Europe this winter.
Europe could be forced to start rationing energy in the winter, starting with industrial uses of natural gas, especially if the winter is cold and China’s economy rebounds, the Executive Director of the International Energy Agency (IEA), Fatih Birol, told the Financial Times in an interview last month.
Many countries in Europe, including the biggest economy Germany, have started asking households to take voluntary measures to conserve energy, so there will be more gas for heating and power demand this winter.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.