INdustrycTceh INsight Logo

Shell defends the decision to buy discounted oil from Russia

Shell defends the decision to buy discounted oil from Russia

March 8, 2022: -Oil primary Shell has sought to defend its decision to buy a heavily-discounted consignment of oil from Russia, which says it would commit the profits to a fund dedicated to humanitarian aid for Ukraine.

On Friday, Shell is purchasing 100,000 metric tons of flagship Urals crude from Russia. Reports were bought at a record discount, with many firms shunning Russian oil because of Moscow’s unprovoked invasion of its neighbor. The purchase did not violate any Western sanctions.

Shell said in a statement on Saturday that it had been in “intense talks with governments and continue to follow their guidance in this issue of security of supply, and are acutely aware we have to navigate this dilemma with the utmost care.”

“We didn’t take this decision lightly, and we understand the strength of feeling around it,” the statement read.

The company has faced good criticism from Ukraine’s Foreign Minister Dmytro Kuleba, who wants companies to cut all business ties with Russia.

On Monday, speaking to CNBC, Kuleba launched a scathing attack on firms still doing business with Russia, which says that some major oil companies could find themselves on the wrong side of history.

“The world will judge them accordingly. And history will judge them accordingly,” he told CNBC.

Shell said it intended to exit its joint ventures with Russian gas giant Gazprom and its related entities.

Meanwhile, rival BP announced Sunday in the previous week that it was offloading its 19.75% stake in Rosneft, a Russian-controlled oil company, potentially hits the British oil major with a costly $25 billion charge.

On Saturday, Shell said that the company welcomed “any direction or insights” from governments or policymakers in its new statement.

“We will continue to choose alternatives to Russian oil wherever possible, but this cannot happen overnight as of how significant Russia is to global supply,” the company said.

Shell defends the decision to buy discounted oil from Russia