Shell’s statement on Tuesday could cut Russia off from a major international buyer.
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“As an immediate first step, the company will stop all spot purchases of Russian crude oil,” the London-based company said in a statement. “It will also close its service stations, the production of aviation fuel and lubricants in Russia.”
Ben van Beurden, Shell’s CEO, apologized for buying Russian crude last week and said all profits would go towards humanitarian aid during the Ukraine crisis.
“We are well aware that our decision last week to purchase a batch of Russian crude oil for processing into products such as gasoline and diesel … was the wrong one, and we are sorry,” van Beurden said in a statement. He pledged to “direct the profits from the limited remaining volumes of Russian oil that we will process to a special fund” and promised to provide assistance to humanitarian organizations in the coming weeks.
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Van Beurden said there are “incredibly difficult compromises” to be made during the war in Ukraine.
In the center of Kyiv, behind makeshift barricades, ordinary Ukrainians work around the clock, preparing food for soldiers and civilians. (Whitney Shefte, Jorge Ribas/The Washington Post)
An embargo on the private sector is already spreading across the global oil markets.
This week, the national average gasoline price in the United States rose to $4.17 a gallon, according to AAA’s Gas Prices website, the highest since the company began tracking gas prices in 2000. go ahead and inflate what drivers in the United States and other countries pay at the gas station.
European governments have so far refrained from banning Russian oil products. And some of Shell’s European colleagues are leaving Russia more cautiously.
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BP has been less resolute than Shell in its intention to phase out energy supplies from Russia. The spokesman said the company “will continue to meet existing contractual obligations, subject to compliance with sanctions, security and delivery requirements, and where it is safe to do so.”
The company also said it would not charter ships owned, operated or flying the Russian flag “where possible”. However, BP could start new business with Russia if it was “necessary to ensure the security of supply.”
French energy giant TotalEnergies also took a more subtle route, saying it would halt new spending in Russia but keep its partnership there, including a nearly 20 percent stake in Russian gas producer Novatek.
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TotalEnergies chief executive Patrick Pouyanne told an energy industry conference on Monday that his company would not give up its ties to Russia, noting that European governments had not instructed it to do so.
“Obviously I have had talks with the highest authorities in my country and they are not pushing us to leave Russia,” he said, according to Reuters.
US officials are looking for ways to ease the burden on global energy markets and ease consumer spending, but analysts warn that there is no supplier that could easily displace Russia, the world’s third-largest energy producer. Oil prices reached their highest level in more than a decade on Monday as it seemed increasingly likely that Western sanctions would not spare Russia’s energy industry.
This week, Russia threatened to cut the flow of gas to Europe via a major pipeline, which could push the countries’ oil prices to over $300 a barrel, according to a Russian official.
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“It is absolutely clear that abandoning Russian oil will lead to catastrophic consequences for the world market,” Russian Deputy Prime Minister Alexander Novak said on state television on Monday. “Rise in prices will be unpredictable. It will be $300 per barrel, if not more,” he said.
Western countries are in talks with Tehran about a possible nuclear deal that could bring Iranian oil back to international markets. According to The Washington Post, U.S. diplomats traveled to Venezuela over the weekend to discuss oil exports from the country.