Shell Apologizes for Buying Russian Crude

Image credit: Photographic Services, Shell International Limited.

Energy giant Shell will immediately stop any further purchase of Russian oil, the company announced today as Shell’s Chief Executive, Ben van Beurden, expressed his regret for the decision to buy a cargo of Russia crude oil last week.

It will also phase out Russian gas and shut its service stations, aviation fuels and lubricants operations in Russia.

“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,” said Van Beurden in a written press release.

“As we have already said, we will commit profits from the limited, remaining amounts of Russian oil we will process to a dedicated fund. We will work with aid partners and humanitarian agencies over the coming days and weeks to determine where the monies from this fund are best placed to alleviate the terrible consequences that this war is having on the people of Ukraine.”

The company’s announcement comes as the US ponders stopping the flow of Russian oil altogether. Western sanctions so far have not restricted the flow of Russia’s crucial energy supplies, but US President Joe Biden is expected to announce a ban on importing fuel from Russia.

European nations so far have not indicated any plans to join in plans to ban Russian fuel as the bloc is heavily reliant on the country for crucial energy supplies.

Russia is one of the world’s biggest petroleum producers and exports approximately 5-6 billion barrels a day of crude. Bank of America predicts that a ban on Russian oil could trigger a global recession and cause oil prices to soar.

In a recent research note to clients, reported by Fortune mag, the bank’s head of global economics research Ethan Harris said that if the US or NATO banned Russian energy exports, oil could reach $200/barrel and lead to a 2% reduction in US GDP growth.

“If the West cuts off most of Russia's energy exports it would be a major shock to global markets,” Harris wrote.

Shell announced last week it will end its involvement in the Nord Stream 2 pipeline project and cut off its arrangements with Russia’s Gazprom and related entities. Other major oil companies, including BP, ExxonMobil, and Centrica, have also cut key commercial links with Russian firms.