• Europe's energy crisis may force the continent to ration access to energy for several years, the CEO of Shell said. 
  • Europe could face "a number of winters " that rationing and finding alternative solutions may be necessary.
  • Russia's cuts to natural gas have strained supplies ahead of key winter months.

Europe may be facing years of energy rationing and the need to find alternative supplies as its energy crisis worsens and Russia restricts natural gas flows, Shell CEO Ben van Beurden said Monday, according to the Financial Times

The continent is facing soaring natural gas prices, dwindling stockpiles, and the looming threat of further supply cuts from Russia as Gazprom readies for a three-day maintenance closure of Nord Stream 1 this week.

Altogether, the crisis will test "solidarity" among EU member states, van Beurden said. 

"It may well be that we have a number of winters where we have to somehow find solutions through efficiency savings, through rationing and a very, very quick buildout of alternatives," he said. "That this is going to be somehow easy, or over, I think is a fantasy that we should put aside."

European electricity prices have soared this year as energy commodities are cut off. The German baseload year-ahead power, Europe's benchmark electricity price, is more than 1,400% higher than the average price between 2010 and 2020. 

Europe is facing a recession as things stand, according to UBS analysts, but that economic outlook can get far more glum if natural gas rationing becomes necessary.

"Crucially, our base case scenario remains that physical rationing of gas will be avoided," strategists wrote in a Thursday note. "Should this assumption turn out to be too optimistic, the economic disruptions would most likely become much worse than our new base case scenario implies."

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