Shell defends ‘difficult decision’ to buy oil from Russia

Shell defended its decision to buy a shipment of crude oil at a discount from Russia last Friday, despite the invasion and bombing of Ukraine.

In a statement, the company said the decision was “difficult” – and that “there was no alternative”.

Ukrainian Foreign Minister Dmytro Kuleba criticized the energy company, questioning on Twitter: “Doesn’t Russian oil smell like Ukrainian blood to you?”

So far, Western countries have not imposed sanctions on Russian oil imports, fearing that this will raise already record energy prices around the world.

However, US Secretary of State Antony Blinken said the US was “actively discussing” with European partners the possibility of banning Russian oil imports while ensuring a “stable global supply”.

Russia is the world’s second largest producer of crude after Saudi Arabia, and supplies about a third of Europe’s demand.

Commenting on its decision, Shell said it was forced to buy oil from Russia to maintain timely supplies of fuel to Europe.

The company said it remained “horrified by the war in Ukraine” and had stopped most activities involving Russian oil, but added that the supply situation was “highly complex”.

Russian oil currently accounts for around 8% of Shell’s active supplies. One of the company’s refineries, which produces diesel, gasoline and other products, is also among the largest in Europe.

“To be clear, without an uninterrupted supply of crude oil to refineries, the energy sector cannot guarantee the continued supply of essential products to people across Europe in the coming weeks,” a spokesperson said.

“Shipments from alternative sources would not have arrived in time to avoid disruptions in market supply.”

“We didn’t make this decision easily and we understand the strong sentiment around it.”

The company also said it will try to choose alternatives to Russian oil “whenever possible”, and that profits from Russian oil will go into a dedicated fund aimed at helping people in Ukraine.

This came shortly after the company announced that it would end all its business partnerships with Russian energy company Gazprom in the face of the invasion of Ukraine. This will involve the sale of its 27.5% stake in a large liquefied natural gas plant and a 50% stake in two oilfield projects in Siberia.

The company will also terminate its participation in the Nord Stream 2 pipeline between Russia and Germany. The 1,200 km gas pipeline under the Baltic Sea had already been suspended by Germany.

In a statement, Shell said it forecast the measure, which would also apply to any “related entities” to Gazprom, would cost about $3 billion. The associated costs will be recorded on your balance sheet later this year.

Shell’s decision followed companies like the multinational BP (British Petroleum), which had already announced that it would sell its stake in Russian state oil giant Rosneft — with a potential impact of $25 billion.

BP said last week that it was too early to say how or to whom its stake in Rosneft would be sold.

Norwegian oil and gas producer Equinor also announced its departure from Russia, saying the conflict had made its current position “unsustainable”.

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