Shell’s ploy to continue importing Russian oil while the oil giant claims otherwise

Shell announced at the beginning of March that it would stop buying Russian crude oil on the spot market. A month later, it turned out that the oil giant was still buying Russian oil. However, technically speaking, the company is not lying.

On March 8, less than two weeks after the start of the war in Ukraine, Shell announced that it would suspend all purchases of spot crude oil. in the Russian market I stopped. The group even apologized for buying additional Russian oil at a huge discount in Eastern Europe shortly after the war began.

Not all Russian oil is Russian

However, we note that a significant part of the oil that Shell buys still comes from Russia. 49.9 percent of the oil in barrels is of Russian origin. The other 50.1 percent gets the oil giant from other countries. Thanks to this combination, Shell can say that the oil in those barrels does not come from an Eastern European country.

While some may find this unfair, the approach is clearly stated in the terms of Shell’s new contract. The group wrote: “Goods are considered to be of Russian origin if they are manufactured in the Russian Federation or if 50 percent or more of their content (by volume) consists of materials manufactured in the Russian Federation.”

Bloomberg He explains that the oil marketed by Shell is called “Latvia blend”. Russian oil comes from Primosrk (near Saint Petersburg) and is shipped to the port of Ventspils in Latvia with a large oil terminal and storage capacity. This is where mixing takes place.

perfectly legal

What Shell does is also perfectly legal. Let’s not forget that the European Union does (yet?) the ban Put on Russian oil, nor on Russian gas† If Shell so desires, the group can continue to sell 100 percent Russian gas.

Not all industry giants follow Shell’s example. TotalEnergies, for example, guarantees that no shipment will arrive “in whole or in part” from Russia. The same goes for Repsol.

However, this case shows two things: “self-punishment” must be approached with extreme caution, and if there is a real political ban, there are indeed many loopholes to get around. Meanwhile, Russia continues to fill its treasury.

†ns)