Shell to withdraw from Russian energy industry, cease oil purchases

(Patria) - Shell announced on Tuesday that it intends to stop buying Russian crude oil and plans to completely withdraw from the Russian energy industry. The energy giant says it plans to "withdraw from its participation in all Russian hydrocarbons, including crude oil, oil products, gas and liquefied natural gas (LNG) in phases, in accordance with new government guidelines".

It added in a press release that as a first step, it will immediately stop purchasing Russian crude oil and close "its service stations, aviation fuel and lubricants operations in Russia", CNN reports.

Shell announced that it will also help humanitarian agencies in the coming days and weeks by donating money through the Ukraine People's Fund.

Last week, Shell said it would abandon its ownership partnership with Russian state-owned energy giant Gazprom in light of Russia's invasion of Ukraine. The news comes a day after British Prime Minister Boris Johnson said coordinated energy sanctions on Moscow, including a ban on Russian oil, were still "on the table". Speaking at a press conference on Monday alongside his Dutch and Canadian counterparts in London, Johnson said it was the "right thing to do" to move away from Russian hydrocarbons. 

Shell also reported that due to the tense market situation, it has temporarily limited the sale of fuel oil, diesel and other products to certain major customers in Germany.

Shell explained the move by the "huge disruptions and shortages in energy markets" caused by the war in Ukraine, subsequent sanctions on Russia, and the growth of economic activity after the pandemic lull.

"In order to continue to meet our contractual obligations, we have limited the sale of fuel oil, diesel and other products in physical markets without prior agreement," the British company stated.

"We are doing everything we can to stabilize supply chains as much as possible, but it is difficult to predict how the situation will develop," they added.

A company spokesperson declined to comment on the decision.