Shell stops buying Putin’s oil and gas and shuts all petrol stations in Russia in U-turn after Ukraine invasion
OIL giant Shell has announced it will no longer buy Russian oil and gas and is closing all of its petrol stations in the country, in response to Putin's invasion of Ukraine.
It comes just days after the company insisted it would continue buying Russian crude oil, saying on Friday it had "no alternative".
In 2017, Shell reportedly had 277 petrol stations in Russia, with plans to double that number to 450 "in the near-term," according to then Shell NeftRoyal CEO, Sergey Starodubtsev.
Cutting its ties with Russia's biggest energy firm Gazprom could mean a loss of up to $3 billion (£2.2bn) in profits.
The energy giant came under huge criticism at the weekend after it bought a cargo of Russian crude for a discounted price.
Shell boss Ben van Beurden has today apologised for the company's actions.
"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," he said in a statement.
The move means Shell will stop buying Russian crude oil and will not renew long-term contracts.
It will also shut its service stations, aviation fuels and lubricants operations in Russia, starting a phased withdrawal from Russian petroleum products, pipeline gas, and liquefied natural gas.
In a statement on Tuesday, the firm said: "This is a complex challenge. Changing this part of the energy system will require concerted action by governments, energy suppliers and customers, and a transition to other energy supplies will take much longer."
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Van Beurden went on: "As we have already said, we will commit profits from the limited, remaining amounts of Russian oil we will process to a dedicated fund.
"We will work with aid partners and humanitarian agencies over the coming days and weeks to determine where the monies from this fund are best placed to alleviate the terrible consequences that this war is having on the people of Ukraine."
Shell is the latest major international firm to join the sanctions against Russia.
A growing number of companies have cut all ties with Russia in response to the conflict.
Retail firms such as H&M have already suspended sales in Russia, after what it called "tragic developments" in Ukraine.
A number of luxury brands such as Burberry and Chanel have said they are only "suspending" sales and not withdrawing entirely in Russia, where the retail market was worth £337 billion last year, the fifth-largest in Europe.
Cosmetic giant Estee Lauder announced on Monday it is closing all of its Russian shops and will stop shipping makeup to retailers in the country.
According to the latest figures, Russia was one of the company's best performers.
RUSSIA BOYCOTT
A number of major firms have announced they are either withdrawing from Russia entirely or suspending sales in the country
- Apple
- Netflix
- Zara
- Jaguar Land Rover
- Estee Lauder
- Burberry
- Chanel
- H&M
- Boohoo
- Ikea
- Levi's
- KPMG
- PricewaterhouseCoopers
- Freshfields
- McKinsey
- Samsung
- TikTok (suspended live-streaming)
- BP
- Shell
- ExxonMobil
- Equinor
- Warner Bros (Suspended new film releases
- Sony
- Disney
- Visa
- Mastercard
- American Express
- PayPal
- General Motors
- Jaguar Land Rover
- Aston Martin
- Rolls-Royce
Three of the so-called Big Four accounting firms, KPMG, EY, and PricewaterhouseCoopers (PwC) - have all said they will no longer have a member firm in Russia, while top law firm Freshfields has said it will no longer work with any clients linked to the Russian state.
Consultancy firm McKinsey, which serves 21 of the 30 biggest Russian companies, announced on Monday it will "no longer serve any government entity in Russia," according to a senior executive.
In technology, Russia's leading smartphone supplier, Samsung, said it will suspend shipments to the country, although it isn't clear whether it will also close its shops.
Ukraine's vice-prime minister Mykhailo Fedorov, who is responsible for digital operations, reportedly urged Samsung to temporarily cease supplying products and services to Russia.
It comes as...
- President Volodymyr Zelenskyy vowed the 'kill ever b*****d' who was shooting and shelling Ukrainian civilians
- Zelenskyy is due to address British MPs today from his bunker as he remains defiant in Kyiv
- Peace talks continue after Russian issued three demands in an ultimatum - which were rejected by Ukraine
- Vladimir Putin has lost yet another general as his troops are reported to have been deserting from the invasion force
- Pictures show abandoned 'Z' tanks and burning Russian trucks as the Russia's costly, grinding advance continues
- Civilians are facing a perilous journey to escape Ukraine - including one boy, 11, who travelled 750 miles on his own
- Brit ex-soldiers are heading to the frontline as they vow to help fight back against Russia
Apple has also halted all product sales in Russia, as well as limiting other services such as Apple Pay and Apple Maps, and closing its shops.
Other tech firms are restricting Kremlin-linked media outlets such as RT - formerly Russia Today - from posting on their platforms after they were flooded with pro-Russian misinformation.
Video-streaming app TikTok has suspended live-streaming in Russia, for example.
Film fans in Russia will be unable to see the new Warner Bros blockbuster The Batman after the company suspended new film releases in the country.
It was joined by Disney and Sony, while Netflix has suspended its service in Russia and put all "future projects" on pause.
🔵 Read our Russia - Ukraine live blog for the very latest updates
And in a move that could bring chaos to Russia's banking system, payment giants Visa, Mastercard, American Express, and PayPal have all pulled out of the Russian market.
Last month, the Russian ruble went into freefall in response to the invasion, triggering a feared run on banks.
However, Russian banks have downplayed the impact of these announcements on their clients.
Russian bank Sberbank said Visa and Mastercard-branded cards would still work "to withdraw cash, make transfers using the card number, and for offline payments, as well as Russian stores".
But Russian-issued Mastercard or Visa cards won't work abroad anymore, while foreign-issued cards won't work inside the country.
Leading carmakers Jaguar Land Rover, General Motors, Aston Martin, and Rolls-Royce are among the firms to halt the delivery of vehicles to Russia due to the conflict.
Construction equipment manufacturer JCB has also paused all operations in the country.
Cars are the UK's biggest Russian export, although only 1% of UK cars went to Russia last year.
Putin has called sanctions on his country a "declaration of war" and vowed it "will not forget" those who have supported Ukraine, warning of "tough retaliation".
On Friday, Shell was forced to apologise after buying 100,000 metric tons of flagship Urals crude oil from Russia.
It was reportedly bought at a record discount after many oil firms shunned Russian oil following its invasion of Ukraine.
Although the purchase didn't violate any Western sanctions, the move was widely criticised, after Ukraine's Foreign Minister Dmytro Kuleba urged companies to cut all business ties with Russia.
Speaking to CNBC last week, Kuleba slammed firms that still do business with Russia, warning that major oil companies which continue to work with the country could find themselves on the wrong side of history.
"The world will judge them accordingly. And history will judge them accordingly," he told presenter Hadley Gamble.
All you need to know about Russia's invasion of Ukraine
Everything you need to know about Russia's invasion of Ukraine...
- Why is Russia invading Ukraine?
- Will the UK go to war?
- How can I join the Ukraine foreign legion?
- What can I do to help Ukraine?
- Who is Ukraine's president Volodymyr Zelenskyy?
- How much gas does the UK get from Russia?
- Is Russia a part of Nato?
- Does Russia have nuclear weapons?
- Why is Ukraine not in Nato?
- How big is the Russian army?
- What is Article 5 of the Nato treaty?
- What is the Minsk agreement?
- Which countries were in the Soviet Union?
- What does the Z mean on Russian tanks? Meaning behind symbols explained
Shell has already announced it intended to leave its joint ventures with Gazprom, the Russian gas giant, and its related firm, and stated over the weekend that all the profits from the discounted Russian oil would go to a humanitarian aid fund for Ukraine.
Van Beurden added today that the Russia-Ukraine war "highlight(s) the dilemma between putting pressure on the Russian government over its atrocities in Ukraine and ensuring stable, secure energy supplies across Europe."
He went on: "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," he added.
Shell is not the only energy firm with a stake in Russia's vast natural resources.
BP, which owns a large stake in Russian energy giant Rosneft, announced within days of the invasion it was cutting ties with the company, after coming under pressure.
Similar pledges followed from ExxonMobil and Equinor to cut Russian investments.
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A number of multinational firms are yet to announce any pausing of Russian services.
Pressure is growing on big food firms such as McDonald's, KFC, and Burger King, as well as brands including Pepsi, Coca-Cola, and Starbucks - all of whom are yet to comment on plans for their Russian operations.
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