Shell boss warns of 'tough winter' with risk of higher prices and gas rationing
Shell chief executive Ben van Beurden said governments should not wait until the last minute to prepare contingency plans.
Europe will face a tough winter with even higher energy costs, Shell chief executive has warned.
“We will be facing a really tough winter in Europe,” said Ben van Beurden.
Prices are set to rise further and “in a worst case, we will be in a situation where we have to ration”, he said.
European governments and industry are on edge as gas supplies through the crucial gas pipeline Nord Stream 1 that brings Russian gas to Europe are halted because of maintenance, and it is not clear if they will ever return.
Mr van Beurden said there is no way to tell if the situation could escalate further. European gas prices have surged more than 400% in the past year.
In Germany, the prospect of rationing is already under discussion, with its economy minister encouraging citizens to take shorter showers like him.
“For a long time, we thought it wasn’t in Russia’s interest to cut off Russia’s largest market,” he said at a conference.
He warned that European governments should not wait until the last minute to prepare contingency plans for what to do if the gas shuts off and if it does, there really are not many options.
Today, European wholesale gas prices eased, but remained at their hugely elevated levels. The price of gas for delivery in August traded at €178 per megawatt hour, up sharply from the beginning of June, and traded higher at almost €183 per MW hour, for October delivery.
There was better news for the cost of crude oil with the price of a barrel of Brent oil falling to $96.46, its lowest level since March. However, a lot of the price fall can be attributed to a stronger dollar bolstered by expectations that the US Federal Reserve will make further aggressive interest rate hikes to counter inflation.
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