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Shell defends decision to buy discounted oil from Russia

Shell defends decision to buy discounted oil from Russia
KEY POINTS
  • On Friday, Shell purchased 100,000 metric tons of flagship Urals crude from Russia.
  • It was reportedly bought at a record discount, with many firms shunning Russian oil due to Moscow’s unprovoked invasion of its neighbor.
  • The purchase did not violate any Western sanctions.

Oil major Shell has sought to defend its decision to buy a heavily-discounted consignment of oil from Russia, saying it would commit the profits to a fund dedicated to humanitarian aid for Ukraine.

On Friday, Shell purchased 100,000 metric tons of flagship Urals crude from Russia. It was reportedly bought at a record discount, with many firms shunning Russian oil due to Moscow’s unprovoked invasion of its neighbor. The purchase did not violate any Western sanctions.

Shell said in a statement late Saturday that it had been in “intense talks with governments and continue to follow their guidance around 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 heavy criticism from Ukraine’s Foreign Minister Dmytro Kuleba, who wants companies to cut all business ties with Russia.

“One question to Shell: doesn’t Russian oil smell Ukrainian blood for you?” Kuleba said in a tweet Saturday.

Speaking to CNBC Monday, Kuleba launched a scathing attack on firms still doing business with Russia, saying 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’s Hadley Gamble.

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

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

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

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

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