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• Shell bought oil at a record discount, as many oil companies are barring Russian oil
• Purchase did not violate any sanctions from Western nations
On Tuesday, British oil giant Shell Plc apologized for buying oil from Russia last week and said the company will start withdrawing itself from all Russian hydrocarbons, including crude oil, petroleum products, gas, and liquefied natural gas (LNG) ‘in a phased manner.’
“As an immediate first step, the company will stop all spot purchases of Russian crude oil. It will also shut its service stations, aviation fuels and lubricants operations in Russia,” Shell said in a statement.
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The London-based oil giant purchased 100,000 metric tons of flagship Urals crude from Russia on Friday at a heavily discounted price, as many firms are barring Russian oil due to Moscow’s unprovoked invasion of Ukraine.
Dilemma between sanctions and securing energy supply
Although the purchase did not violate any Western sanctions, Shell faced heavy criticism from Ukraine’s Foreign Minister Dmytro Kuleba, who has urged companies to cut all business ties with Russia.
Shell CEO Ben van Beurden said Tuesday that the company was “acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one and we are sorry.”
Over the weekend, the oil giant said that it would commit the profits from the discounted Russian oil to a fund dedicated to humanitarian aid for Ukraine.
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Van Beurden said that the societal challenges thrown up by the Russia-Ukraine war “highlight the dilemma between putting pressure on the Russian government over its atrocities in Ukraine and ensuring stable, secure energy supplies across Europe.”
“Ultimately, it is for governments to decide on the incredibly difficult trade-offs that must be made during the war in Ukraine. We will continue to work with them to help manage the potential impacts on the security of energy supplies, particularly in Europe,” he added.
Picture Credit: Bloomberg