Update: Shell on Tuesday apologized for buying 100,000 metric tons of Russian crude oil while promising to end involvement in all Russian hydrocarbons from oil to natural gas. "Despite being made with security of supplies at the forefront of our thinking," the decision to purchase a cargo of Russian flagship Urals crude from Swiss trader Trafigura at a record discount, "was not the right one and we are sorry," CEO Ben van Beurden said, per CNBC and Reuters. "The company will stop all spot purchases of Russian crude oil. It will also shut its service stations, aviation fuels and lubricants operations in Russia," a company statement adds. Our original story from Monday follows:
Days after announcing it would exit joint ventures with Russian state-owned energy giant Gazprom in response to Russia's "senseless act of military aggression" against Ukraine, Shell said it had no choice but to buy discounted Russian oil. On Saturday, the British oil giant acknowledged purchasing a cargo of Russian crude oil a day earlier. It was a "difficult" decision, but there could be "no alternative" without disrupting supplies to Europe, the company said, per the BBC. That drew no sympathy from Ukrainian Foreign Minister Dmytro Kuleba. "Doesn't Russian oil smell [of] Ukrainian blood for you?" he tweeted, calling on "all conscious people around the globe to demand multinational companies to cut all business ties with Russia."
Shell previously announced it would exit $3 billion worth of projects with Gazprom and "related entities" in Russia, which includes selling a 27.5% stake in the Sakhalin-2 offshore liquefied natural gas plant and a 50% interest in two oil field projects in western Siberia. On Saturday, it said it remains "appalled by the war in Ukraine"—hence why it has stopped most activities related to Russian oil, which makes up 8% of its working supplies. But "without an uninterrupted supply of crude oil to refineries, the energy industry cannot assure continued provision of essential products to people across Europe over the weeks ahead," Shell said, per Insider. "Cargoes from alternative sources would not have arrived in time to avoid disruptions to market supply."
The company said profits from Russian oil will go toward helping the people of Ukraine. "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," Shell continued, per Bloomberg, adding it was "in intense talks with governments ... around this issue of security of supply." Many traders have refused to buy discounted Russian oil even as Western countries have been hesitant to sanction Russia's oil and gas industry for fear of rising prices around the world. On Sunday, however, US Secretary of State Antony Blinken said the US is in active talks with European partners about banning Russian oil imports while maintaining a "steady global supply." (Read more Shell stories.)