May 25, 2022

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Shell BP to withdraw from Russian oil and gas

Shell BP to withdraw from Russian oil and gas

European oil giants

seashells

shill 3.43%

PLC and

BP

BP 4.81%

PLC said it was further backing away from Russia, with Shell saying it would immediately halt all spot purchases of crude from the country and phase out other trade and business transactions.

A BP spokesperson said it would not enter into new business with Russian entities or business involving Russian ports “unless necessary to ensure security of supply.”

The two took their steps before what people familiar with the matter say was a plan by the Biden administration to ban Russian oil imports into the United States. The Wall Street Journal reported, An announcement on this issue is imminent. The administration’s deliberations over the ban escalated as bipartisan lawmakers, including the Speaker of the House of Representatives, ramped up

Nancy PelosiHe called for action on the issue, and the White House declined to comment.

Brent crude futures, the global oil standard, rose more than 5% Early Tuesday. Oil prices for both metrics were already high prior to the Journal’s report but rose further after that.

Shell had previously said it would Withdrawal from a number of joint ventures in the country. On Tuesday, it said it would also close service stations and operations for jet fuel and lubricants in Russia, and would not renew any Russian contracts. It said it would find alternative supplies of oil as soon as possible, although it warned that it could take weeks to make up the difference in full, leading to production cuts at some refineries.

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Shell faced a backlash last week and over the weekend when it picked up a shipment of Russian crude at a bargain price, after several other players had done so. They started reducing their purchasesresulting in unofficial bans from some buyers in response to Russia’s invasion of Ukraine.

The company on Tuesday apologized for the purchase and said it would commit its purchases of Russian oil to humanitarian funds aimed at alleviating the crisis in Ukraine. Shell had previously said that it would exit its joint ventures with the Russian energy giant

Gazprom.

The spokesman said BP would not charter Russian-owned or Russian-operated vessels where possible. In cases where it already has, “the Company will continue to monitor its safe passage and comply with all applicable local penalties and restrictions.” The decisions were made in the middle of last week, the spokesperson said, describing the situation as a “complex and rapidly changing area” that BP continues to review. Previously, BP said it would give up its 20% stake in the oil giant

RosneftAnd the

After pressure from the UK government.

Russia’s attack on Ukraine helped push the price of oil over $100 a barrel for the first time since 2014. Here’s how rising oil costs could fuel inflation in the US economy. Image caption: Todd Johnson

The United States and its allies left energy out of a raft of economic sanctions imposed on Moscow in response to the invasion. However, many refineries have gone further, avoiding Russian crude oil. Such self-imposed sanctions have drained a large portion of global supplies, pushing the prices of the international benchmark, Brent crude, to rise sharply. It is also causing a boost to Russia’s energy supply chain, traders say, which has prompted refiners to cut production.

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