ECONOMY

Energy giant Shell announces it will sever ties with Russia over invasion of Ukraine

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Energy giant Shell says it will stop buying Russian oil and natural gas and shut down its service stations, aviation fuels and other operations in the country amid international pressure for companies to sever ties over the invasion of Ukraine.

The company said in a statement that it would withdraw from all Russian hydrocarbons, including crude oil, petroleum products, natural gas and liquefied natural gas, “in a phased manner.”

The decision comes as surging oil prices have been rattling global markets and days after Ukraine’s foreign minister criticized Shell for continuing to buy Russian oil, lashing out at the company for continuing to do business with President Vladimir Putin’s government.

“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel — despite being made with security of supplies at the forefront of our thinking — was not the right one and we are sorry,” chief executive Ben van Beurden said.

He said profits from the company’s “limited, remaining amounts of Russian oil” would go to a fund for relief efforts for Ukrainians.

Ukrainian Foreign Minister Dmytro Kuleba said he had been told Shell “discreetly” bought the oil on Friday (local time) and appealed to the public to pressure the company and other international firms to halt such purchases.

“One question to Shell: doesn’t Russian oil smell [like] Ukrainian blood for you?” Mr Kuleba said on Twitter.

“I call on all conscious people around the globe to demand multinational companies to cut all business ties with Russia.”

Last week, Shell said it was “shocked by the loss of life in Ukraine” and would end its joint ventures with Gazprom, the massive oil and gas company controlled by the Russian government.

Pump taps cover with oil in the Midway Sunset oilfield, California
Russia is the world’s second-largest producer of oil.(Reuters)

While the US, Britain and the European Union have imposed tough economic sanctions on Russia, they have stopped short of banning oil and gas imports from Russia because of concerns about the impact that would have on global energy supplies.

However Germany suspended the Nord Stream 2 project, a 1,230-kilometre pipeline carrying natural gas from Russia to supply gas to European Union countries.

The United States also imposed sanctions on the company which runs the pipeline.

Russia is the world’s second-biggest oil producer, accounting for more than 12 per cent of global production, according to the International Energy Agency.

Many other companies around the world have also moved to increase the financial pressure on Russia and its people because of Moscow’s attack on Ukraine.

On Sunday, Mastercard and Visa announced they would be suspending their services in Russia.

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Putin says Western sanctions on Moscow are “akin to declaration of war”.(Sean Rubinsztein-Dunlop)

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