Key Highlights:
- Shell bans the import of Russian crude oil and plans to phase out the involvement with Russia.
- The U.S. and European countries decide to ban Russian oil imports.
- Shell plans to end its involvement in the Nord Stream 2 Baltic gas pipeline linking Russia to Germany.
Shell has confirmed that it will stop buying Russian crude and gradually phase out its involvement with Russian hydrocarbons from oil to natural gas over the Ukraine invasion. With this announcement, Shell has become the first major Western oil company to abandon Russia entirely.
The oil prices surged on 7th March and reached over $139 a barrel and hit the highest level since July 2008. This happened when the U.S. and European allies began to consider banning Russian oil imports over Moscow’s invasion of Ukraine.
Shell discontinues oil supply
Shell also apologized for buying Russian crude last week even after stating it would pull out the Russian operations. This decision also included the Sakhalin 2 LNG plant in which Shell holds a 27.5% stake and is operated by Gazprom.
The CEO Ben van Beurden, officially commented, “We are acutely aware that our decision last week to purchase a cargo of Russian crude oil…was not the right one and we are sorry.”
Shell had purchased a cargo of Russian crude oil from Swiss trader Trafigura, it was priced at a record low at Brent minus $28.50 a barrel.
Changing Crude oil supply chain
Last month, the rival company BP, abandoned its 19.75% stake in Rosneft- the Russian oil giant.
Shell also highlighted that discontinuing the crude oil supply chain from Russia will remove volumes and shut the service stations in Russia, including the aviation fuels and lubricants operations in the country.
Although the supply chain will take weeks to complete, the action would lead to reduced output from some of its refineries while its withdrawal from Russian petroleum products will be phased.
