Oil and gas giant Shell is busy defending its purchase of Russian oil despite a worldwide movement shunning trade against Moscow. In a statement, Shell insisted that it had to make this “difficult decision” of buying heavily discounted Russian oil.
No Current Sanctions on Russian Oil Imports
Over the weekend, Shell confirmed that it bought a cargo of Russian oil, as it had “no alternative” to keep its refineries open. To be fair, there are no current sanctions on Russian oil imports.
Western companies have yet to impose boycotts on petroleum as prices are already high. Implementing any sanctions can push oil prices even higher.
However, many Western nations frown on companies still dealing with Moscow after its invasion of Ukraine.
In fact, Ukrainian Foreign Minister Dmytro Kuleba asked Shell about their decision on Twitter. “”Doesn’t Russian oil smell Ukrainian blood for you?” he posted.
Russia Is World’s 2nd Largest Oil Exporter
The current no-embargo policy against oil will likely change soon. Last Sunday, Secretary of State Antony Blinken said that the US is now engaging with its European counterparts.
The country is now in active discussion to include Russian oil in the list of banned exports.
At the same time, the countries are formulating a way to ensure continuous global supply. Russia is the world’s second largest exporter of crude oil, second to Saudi Arabia.
The country supplies around one-third of European requirements. For Shell, 8% of its total working supplies consists of Russian oil.
Shell Defends Its Decision To Buy Russian Oil
Meanwhile, Shell insisted they had to buy Russian oil in order to continue delivering Europe’s fuel requirement.
However, the company admitted that given Russia’s share in their output, an outright ban is a highly complex situation.
Even as Western allies didn’t ban Russian oil imports, refiners found it difficult to trade with Moscow has given restrictions on finances and shipping.
Reportedly, Shell purchased 100,000 metric tons of Russia’s Urals crude at a record $28.50 discount per barrel. Shell continues to buy Russian oil for its refineries and petrochemical plants as it searches for new suppliers.
According to a spokesperson, “cargoes from alternative sources would not have arrived in time to avoid disruptions to market supply. We didn’t take this decision lightly and we understand the strength of feeling around it.”
Profits To Go To Helping Ukrainians
Shell also defended its decision as aboveboard. Prior to its purchase, it consulted various governments to make sure Shell didn’t violate any guidelines. The company said it remains “ acutely aware we have to navigate this dilemma with the utmost care.”
In addition, Shell committed to using the profits from its Russian oil purchases to help the Ukrainian people.
The commitment to help Ukraine follows earlier reports that Shell already terminated its joint ventures with Russian energy giant Gazprom.
The company will sell its 27.5% stake in a liquefied natural gas plant. It will also abandon its 50% interest in two Siberian oilfields. Earlier, Shell also dropped its involvement in the Nord Stream 2 pipeline between Russia and Germany.
Watch the Inside News video reporting that Shell defends decision to buy discounted oil from Russia:
Do you support Shell’s decision to purchase discounted Russian oil to continue its production run in Europe? Will setting aside profits for a Ukrainian fund offset their decision?
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