CEO Ben van Beurden has apologised
(Picture: Ben Stansall/AFP/Getty Images)Oil giant Shell has announced a self-imposed ban on buying Russian oil and will shut all its operations in Russia after widespread criticism of its decision to buy a cargo of Russian crude oil last week.
CEO Ben van Beurden today apologised for buying Urals oil, which he said was done in the interest of energy security.
He said: “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 will stop all spot purchases of Russian crude immediately and will not renew contracts, but said that changing its supply chain could take weeks. It will also lead to reduced throughput at some of its refineries.
The oil giant will also shut its petrol stations, aviation fuel and lubricants operations in Russia, and will ultimately phase out its involvement in all other Russian hydrocarbons, including petroleum products, gas and liquefied natural gas.
The pledges go beyond Shell’s previously announced decision to withdraw from joint ventures with Kremlin-backed gas giant Gazprom.
The escalation follows criticism of Shell’s decision to buy Russian fossil fuels. Ukrainian Foreign Minister Dmytro Kuleba hit out at the energy company, asking on Twitter: “Doesn’t Russian oil smell of Ukrainian blood for you?”
Shell previously defended its decision to purchase the oil amid the ongoing conflict in Ukraine, calling the decision “difficult”.
On Tuesday, it repeated its promise to commit profits from any remaining Russian oil into a dedicated fund to help Ukrainian people affected by the conflict.
Van Beurden said Shell had been driven by the need to maintain energy supplies, and was in discussion with governments about moving away from Russian sources.
“Threats today to stop pipeline flows to Europe further illustrate the difficult choices and potential consequences we face as we try to do this,” he said.
Oil prices spiked to a 14-year high on Monday after the US suggested it could ban all Russian oil imports. Brent fell back after European leaders downplayed that suggestion.
While a wholesale ban now seems less likely, experts say Russian oil is increasingly struggling to find buyers in the market amid concerns about how to pay for it, credit insurance and possible sanctions violations.
Brent crude ticked slightly higher after Shell’s announcement and was up 3.3% at $127 a barrel. It had touched $139 early on Monday.
