Shell apologized Tuesday after its purchase of a shipment of Russian oil at a steep discount sparked outrage — adding that it would wind down business dealings with the country following its widely condemned invasion of Ukraine.
The global energy firm faced criticism last week for buying 100,000 metric tons of Russian crude oil for $28.50 less per barrel than the sale price displayed on the Brent crude oil benchmark. The transaction closed as many other Western firms, including energy companies, cut ties with Russia in response to the Ukraine invasion.
“We are 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,” Shell CEO Ben van Beurden said in a statement.
Shell said it would immediately stop purchases of Russian crude oil on the spot market and update its supply chain to remove Russian oil “as fast as possible.”
Additionally, the company said it would shutter service stations, aviation fuels and lubricants operations in Russia and begin a “phased withdrawal from Russian petroleum products, pipeline gas and LNG” — among other steps meant to end its dealings with Russia.
The US national average for a gallon of gas is now $4.17. ETIENNE LAURENT
Gas prices at a Shell station are seen above $6 a gallon at a filling station in San Francisco, Monday, March 7, 2022. Juliet WilliamsFurther profits from the sale of remaining Russian oil supplies will be donated to humanitarian groups working to help people affected by the Ukraine war, according to the company. Shell had already detailed plans to end its partnership with Russia-based energy firm Gazprom, exiting a 27.5% stake in their joint project.
Shell’s reversal of course came days after Ukraine Foreign Minister Dmytro Kuleba slammed oil companies that were still maintaining business ties with Russia.
“The world will judge them accordingly. And history will judge them accordingly,” Kuleba told CNBC.
CEO of Royal Dutch Shell Ben van Beurden said the decision to buy from Russia “was not the right one.” Horacio VillalobosOil prices have surged in recent days after mounting economic sanctions on Russia and geopolitical tensions disrupt shipments. The US oil benchmark was trading above $122 per barrel on Tuesday and US gas prices have hit their highest level on record.
Meanwhile, President Biden is set to announce a ban on Russian oil and gas imports on Tuesday — a move the Kremlin warns would cause oil to surge to $300 per barrel.
