Remorseful Shell abandons Russian oil

[LONDON] Shell stopped buying Russian crude on Tuesday and said it would phase out its involvement in all Russian hydrocarbons from oil to natural gas over Ukraine, becoming one of the first major Western oil companies to abandon Russia entirely.

Oil prices soared above US$139 a barrel on Monday to hit their highest level since July 2008 as the United States and European allies began to consider banning Russian oil imports over Moscow's invasion of Ukraine.

Shell also apologised for buying Russian crude last week after it had said it would pull out of its Russian operations, including the Sakhalin 2 LNG plant in which it holds a 27.5 per cent stake and which is operated by Gazprom.

"We are acutely aware that our decision last week to purchase a cargo of Russian crude oil ... was not the right one and we are sorry," chief executive officer Ben van Beurden said.

Shell bought a cargo of Russian crude oil from Swiss trader Trafigura at a record low of dated Brent minus US$28.50 a barrel, traders said on Friday.

British rival BP said last month it was abandoning its 19.75 per cent stake in Russian oil giant Rosneft.

Shell said it would change its crude oil supply chain to remove volumes from Russia "as fast as possible" and shut its service stations in Russia, as well as its aviation fuels and lubricants operations in the country.

The company said the supply chain change could take weeks to complete and would lead to reduced output from some of its refineries while its withdrawal from Russian petroleum products, pipeline gas and liquefied natural gas (LNG) will be phased.

The company also plans to end its involvement in the Nord Stream 2 Baltic gas pipeline linking Russia to Germany, which it helped finance as a part of a consortium. REUTERS