Shell, the energy giant, announced Tuesday that it would stop buying Russian oil and natural gasoline and close its service stations and aviation fuels operations in Russia. This was amid international pressure from companies to cut ties due to the invasion of Ukraine.
In a statement, the company stated that it would stop buying Russian hydrocarbons including crude oil and petroleum products.
This decision comes after surging oil prices have been rattling world markets. It also comes days after Shell’s foreign minister criticised Shell for continuing its Russian oil purchases, and lashed out at Shell for doing business with President Vladimir Putin.
CEO Ben van Beurden stated, “We are acutely aware of the fact that our decision to buy a cargo Russian crude oil for refinement into petrol and diesel — despite having the security of supply at the forefront our thinking — wasn’t the right one. We are sorry.”
He stated that the company’s “limited and remaining Russian oil” profits would be used to fund relief efforts for Ukrainians.
Dmytro Kuleba, the Ukrainian Foreign Minister, stated that Shell had “discreetly purchased” the oil on Friday. He appealed to the public for pressure to stop such purchases by the company and other international companies.
Kuleba tweeted, “One question to Shell. Doesn’t Russian oil smell like) Ukrainian blood?” “I appeal to all people to demand that multinational companies cut all business ties to Russia.”
Last week Shell stated that it was shocked by the deaths in Ukraine and would terminate its joint ventures and agreements with Gazprom, a huge Russian oil and gas company.
The European Union, the United States, and Britain have all imposed severe economic sanctions against Russia. However, they have not yet banned oil and gas imports from Russia due to concerns about the potential impact on global energy supplies. According to the International Energy Agency, Russia is the second-largest oil producer in the world, with more than 12% of the global production.
Ukraine and its supporters called for countries to stop buying Russian oil in order to limit funding for Putin’s military operations. However, this will have a negative impact on consumers.
Oil was trading at $90 per barrel a month ago. Prices are now at $120 per barrel, as buyers avoid Russian crude oil. Many refiners worry that sanctions may be imposed in future. They fear that they will be left with oil that they can’t resell for gasoline if sanctions are imposed in the future.
Van Beurden stated that these societal issues highlight the dilemma of putting pressure on Russia over its atrocities and ensuring stable and secure energy supplies throughout Europe.
He stated that Shell would collaborate with governments to “help manage the potential effects on the security and supply of energy supplies, especially in Europe.”
