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Shell PLC said it would donate profits from Russian oil purchases to efforts to alleviate the humanitarian crisis in Ukraine following outrage over the company’s bid for Russian oil.
The London-listed energy company said it would choose alternatives to Russian oil where possible, but it can’t stop buying oil overnight because Russia provides such a large chunk of the world’s supply. Shell said its refiners need some Russian crude to continue producing gasoline and diesel.
“Without an uninterrupted supply of crude oil to refineries, the energy industry cannot ensure the continued supply of vital products to the population of Europe in the coming weeks,” Shell said. “Consignments from alternative sources would not have arrived in time to avoid interruptions in supply to the market.”
RUSSIA-UKRAINE: GAS PRICES EXCEED $4/GAL FOR THE FIRST TIME SINCE 2008
Shell released a statement over the weekend after buying 100,000 metric tons of Russian Urals oil at a bargain price on Friday, paying $28.50 a barrel less than the base oil price, the Journal reported, citing people familiar with the deal, in what is the most the biggest discount ever.
The purchase attracted the attention of the Ukrainian government, the British media and rival traders because, after Moscow’s invasion, Western energy companies shunned Russian oil.
Shell PLC said it would donate profits from Russian oil purchases to efforts to alleviate the humanitarian crisis in Ukraine following outrage over the company’s bid for Russian oil. (Associated Press / Associated Press)
Ukrainian Foreign Minister Dmytro Kuleba tweeted on Saturday: “One question for @Shell: does Russian oil smell like Ukrainian blood to you? I call on all conscientious people around the world to demand that multinational companies sever all business ties with Russia. .”
Shell said it would funnel profits from purchased Russian oil into the fund and would work with aid and humanitarian agencies to decide where the money would best go to alleviate the suffering of Ukrainians.
SHELL MAKES A ‘DIFFICULT’ DECISION TO BUY RUSSIAN OIL, PROMISES TO BUY ELSEWHERE
Since the imposition of sanctions against Moscow, oil traders, refiners and bankers financing the crude oil trade have withdrawn from buying oil from Russia, one of the world’s largest producers. The depletion of Russian oil from Western markets has driven up prices, with benchmark U.S. oil prices hitting $115 a barrel on Friday, the highest level since 2008.
Since the imposition of sanctions against Moscow, oil traders, refiners and bankers financing the crude oil trade have withdrawn from buying oil from Russia, one of the world’s largest producers. (iStock)
Shell said it had been discussing with governments the implications of the war for energy markets. The company said its understanding is that governments intend to continue supplying energy from Russia for the time being to ensure supply security.
The US and its allies have so far shielded oil and gas exports from their sanctions against Moscow in an effort to prevent a surge in domestic energy prices while putting pressure on the Russian economy. However, Secretary of State Anthony Blinken said Sunday that Washington and its European partners are discussing a ban on Russian oil, a move that would deprive Moscow of a vital source of dollars.
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Shell bought a shipment of Urals oil from trader Trafigura Group Pte. Ltd. Russian oil prices began to fall even before the invasion, as refineries turned to alternative grades of oil in the North Sea and elsewhere, fearing reputational damage and that Russian oil could be hit by sanctions.