Radical Cut: Shell Completely Abandons Russian Oil And Gas Business

London, UK - Energy giant Shell is about to make a serious cut to its energy operations in Russia. The company announced today that it will gradually withdraw from all fossil hydrocarbon businesses with Russia. That includes crude oil, petroleum products, gas and liquefied natural gas (LNG).

Last week, Shell came under criticism for buying a cargo of Russian crude at a deep discount to refine into products such as gasoline and diesel. Shell now explicitly regrets this move.

In the future, Shell does not want to buy Russian crude oil on the spot market and will no longer extend term contracts. Russian crude oil will then be removed from the supply chains and Shell wants to implement alternatives in a timely manner. However, it said this could take several weeks and temporarily result in lower throughput at some refineries.

Shell's withdrawal from Russia also includes its service station operations, aviation fuels business and lubricants. According to Shell, this process will begin immediately. A gradual phase-out of Russian petroleum products, pipeline gas and LNG is also to begin. These are complex challenges, however, and the transition of this part will require "concerted action by governments, utilities and customers," as Shell points out. The transition to other energy sources will take much longer.

On the world market, the price of a barrel of crude oil continues to climb based on market speculation alone. Russia cannot profit from this. Even without a concrete oil embargo, Russian crude oil is currently hardly finding any buyers.

Source: IWR Online, 08 Mar 2022