Shell plc today announced its intention to pull out of its involvements in all Russian hydrocarbons, including crude oil, petroleum products, gas, and liquefied natural gas.
The decision comes after Shell was criticized for buying 100,000 metric tons of heavily discounted crude oil from Russia. Ukraine’s foreign minister, condemning the purchase, asked Shell if the oil smelled like Ukrainian blood. The company defended its decision by saying it only had supply in mind but today apologized, saying that the decision to purchase that oil was not the right one.
Now, Shell says it will immediately stop buying Russian crude oil on the spot market, will not renew term contracts, and will further change its oil supply to remove Russian volumes. The latter will be done in close consultation with governments and the company will work to find alternative supplies, though it expects the process to take some time.
Read More: Shell Defends ‘Difficult’ Decision To Buy Russian Oil At Record Discount Price
Shell announces intent to withdraw from all Russian oil & gas, aligned with new government guidance.
As an immediate first step, we will stop all spot purchases of Russian crude oil, shut service stations, aviation fuels & lubricants operations in Russia.
— Shell (@Shell) March 8, 2022
The energy giant will also shut down service stations, aviation fuels, and lubrication operations in Russia. Finally, it said that it will start a phased withdrawal from Russian petroleum products, pipeline gas, and liquid natural gas.
Russia is the world’s second-largest oil producer, accounting for 12 percent of global production, and this conflict has raised the price of oil considerably. Ukraine has called on its supporters to boycott Russian supply in order to slow funding to the country’s military, which has been accused of breaking a ceasefire and shelling evacuation corridors that were set up to allow civilians to flee the besieged city of Mariupol, reports Al Jazeera.
The U.S. has endeavored to push its European allies to consider banning Russian oil imports. In retaliation, Moscow today threatened to close a major gas pipeline to Germany, The Guardian reports.
“Our actions to date have been guided by continuous discussions with governments about the need to disentangle society from Russian energy flows, while maintaining energy supplies,” said Ben van Beurden, Shell’s CEO. “Threats today to stop pipeline flows to Europe further illustrate the difficult choices and potential consequences we face as we try to do this.”
As stated previously, Shell plans to commit profits from the oil it bought from Russia to a dedicated fund. It will then work with aid partners and humanitarian agencies to determine where best to spend the money from the fund to “alleviate the terrible consequences that this was is having on the people of Ukraine,” said van Beurden.
I am told that Shell discretely bought some Russian oil yesterday. One question to @Shell: doesn’t Russian oil smell Ukrainian blood for you? I call on all conscious people around the globe to demand multinational companies to cut all business ties with Russia.
— Dmytro Kuleba (@DmytroKuleba) March 5, 2022