The Shell logo in front of a Shell gas station on July 30, 2020 in San Rafael, California. Royal Dutch Shell reported second-quarter adjusted earnings of $638 million, compared to a net income of $3.5 billion a year earlier.
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The largest oil company Shell on Tuesday apologized for buying a batch of Russian oil at a significant discount and announced that it was refusing to participate in all Russian hydrocarbons.
“As an immediate first step, the company will stop all spot purchases of Russian crude oil. It will also close its filling stations and aviation fuel and lubricants operations in Russia,” the statement said.
On Friday, Shell purchased 100,000 metric tons of Urals flagship oil from Russia. It was reportedly bought at a record discount as many firms shunned Russian oil due to Moscow’s unprovoked invasion of the neighboring country. The purchase did not violate any Western sanctions.
The company was heavily criticized for the purchase, including by Ukrainian Foreign Minister Dmytro Kuleba, who urged the companies to sever all business ties with Russia.
Shell CEO Ben van Beurden said on Tuesday that the company was “very aware that our decision last week to purchase a shipment of Russian crude oil for processing into products such as gasoline and diesel, despite the fact that we made a decision on the security of supply at the forefront of our thinking.” – was wrong and we are sorry.”
Speaking on CNBC last week, Kuleba lambasted companies still doing business with Russia, saying some big oil companies could be on the wrong side of history.
“The world will judge them accordingly. And history will judge them accordingly,” he told CNBC’s Hadley Gamble.
Shell has already said it intends to pull out of its joint ventures with Russian gas giant Gazprom and its affiliates, and said over the weekend that it would funnel profits from discounted Russian oil into a fund dedicated to Ukraine’s humanitarian aid.
Van Beurden added on Tuesday that the social problems resulting from the Russo-Ukrainian war “highlight the dilemma between putting pressure on the Russian government over its atrocities in Ukraine and securing stable and reliable energy supplies across Europe.”
“Ultimately, governments must make decisions about the incredibly difficult trade-offs that must be made during the war in Ukraine. We will continue to work with them to help manage the potential security implications for energy supplies, especially in Europe,” he added.