Here is why Shell is stopping crude oil purchases from Russia

On Tuesday, Shell (LON: SHEL) apologized for purchasing a discounted Russian oil consignment. The company bought 100,000 metric tonnes of leading Urals crude from Russia at a considerable discount. The oil major has indicated that it is withdrawing its involvement in Russian crude oil.

A statement from the company stated:

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As an immediate first step, 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.

Shell purchased Urals crude at a discount

The company had purchased the oil at a record discount as most oil companies shinned Russian oil because it invaded Ukraine. It is vital to note that Shell’s purchase didn’t infringe any Western instituted sanctions on Moscow.

However, Shell became under heavy criticism from various sections because of the purchase, including from the Ukrainian Foreign Minister Dmytro Kuleba. Kuleba has called for firms to cuts their business operations with Moscow.

The company’s CEO Ben van Beurden said that shell was:

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.

Last week, in an interview with CNBC’s Hadley Gamble, Kuleba unleashed a harsh attack on corporations currently doing business with Moscow, claiming that some large oil corporations may find themselves on history’s wrong side.

Shell to abandon joint ventures with Gazprom

Shell has previously declared that it intends to abandon its partnerships with Russian gas behemoth Gazprom and its affiliated organizations. It also announced during the weekend that the earnings from the cheap Russian oil would be directed to a foundation devoted to humanitarian help for Ukraine.

The societal issues posed by the Russia-Ukraine conflict, according to Van Beurden, underscore the conflict between exerting pressure on Moscow over its crimes in Ukraine and guaranteeing stable, safe gas supplies across Europe. Van Beurden added:

Ultimately, it is for governments to decide on the incredibly difficult trade-offs that must be made during the war in Ukraine. We will continue to work with them to help manage the potential impacts on the security of energy supplies, particularly in Europe.