Shell CEO: Europe may face winter energy rationing

Ben van Beurden said the fallout from Russia’s invasion of Ukraine will result in a big rise in bills, and the prospective need to ration supplies.

“It will be a really tough winter in Europe,” Ben van Beurden told the Aurora spring conference in Oxford yesterday (14 July). “We will all face very significant escalation in energy prices. In the worst case, Europe will need to ration its energy consumption.”

Prices are forecast to continue rising in the autumn, with uncertainty around Russia’s intention to throttle supply.

Van Beurden said there was “no way of telling” whether Russia would restart gas flows into Europe via the Nord Stream 1 pipeline after maintenance started on Monday. It is due to conclude on 21 July.

“Putin has surprised quite a few of us,” he said. “I feel disappointed by the outcomes. He has also shown that he better be taken seriously when he makes threats… For a long time we thought it was not in Russia’s interest to cut off Russia’s largest market. He is able and willing to weaponise supplies.”

Last week, the research firm Cornwall Insight significantly raised its forecasts to show that the energy price cap in the UK was on track to rise to £3,244 a year in October 2022, in the next quarterly adjustment made by the regulator Ofgem.

The average UK household energy bill is estimated to be on track to reach more than £3,300 annually this winter as soaring wholesale energy costs are passed on to consumers.