Shell will stop buying Russian oil and gas

Shell has announced that it will stop buying any Russian oil, gas or LNG and it has apologised for its decision last week to buy a cargo of Russian crude oil at a discounted price.

"We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one and we are sorry," Shell's Chief Executive Officer, Ben van Beurden said in a statement.

As an immediate first step, Shell now says it will stop all spot purchases of Russian crude oil. It will also shut its service stations, aviation fuels and lubricants operations in Russia. The energy giant said that this will be done in a phased manner, aligned with new government guidance.

Shell's CEO added: "We will commit profits from the limited, remaining amounts of Russian oil we will process to a dedicated fund. We will work with aid partners and humanitarian agencies over the coming days and weeks to determine where the monies from this fund are best placed to alleviate the terrible consequences that this war is having on the people of Ukraine."

Shell laid out it plans ranging from immediately stopping buying Russian crude oil on the spot market and Shell will not renew term contracts. In addition, Shell will look to change its crude oil supply chain to remove Russian volumes.

"We will do this as fast as possible, but the physical location and availability of alternatives mean this could take weeks to complete and will lead to reduced throughput at some of our refineries," Shell noted in its press statement.

Shell also touched on its plans to shut its network of Russian service stations, aviation fuels and lubricants operations in Russia.

Finally, Shell stated it would start a phased withdrawal from Russian petroleum products, pipeline gas and LNG but that this was a complex challenge that will not change over night.

Van Beurden said: “Ultimately, it is for governments to decide on 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 impacts on the security of energy supplies, particularly in Europe."