Oil and gas group Shell has bought 725,000 barrels of Russian oil at a relatively high discount. The company paid 26 euros per barrel less than the prevailing price for Brent oil, an important type of oil on the world market. According to international media including the Financial Times Shell can make more than 18 million euros profit on the cargo.
There is no international ban on oil and gas from Russia, but last week traders were hesitant to buy Russian commodities. The cargo that Shell is now buying from the trading company Trafigura has therefore fallen in price in recent days.
Shell announced Monday it would withdraw from Russia because of the Russian invasion of Ukraine. A collaboration with the Russian company Gazprom is being broken.
Important oil
“We have also stopped most of the Russian oil business,” the company said in a statement. “But we continue to buy it for some of our refineries and chemical plants to make sure we can make fuels and products that consumers and businesses use every day.”
The company wants to buy less oil from Russia in the long term if there are alternatives on the market. “But this is complex as Russian oil plays an important role in the global supply and there are relatively few alternatives in the current tight market.”
Moral Compass
According to energy expert Lucia van Geuns of The Hague Center for Strategic Studies, the Russian oil is still needed for the production of diesel, for example. “We can’t live without it for the time being and there is no blanket boycott on Russian oil. What you’re seeing now is that the trade is putting itself in restrictions around Russian oil. That’s not just because of a moral compass, but also because they’re at greater risk with the oil. The Shell traders have apparently thought they can take the risk at this price.”
The price of crude oil has risen rapidly since the war in Ukraine. A barrel of crude oil now costs $118, compared to $90 a month ago. Van Geuns: “If the oil from Russia were not bought, the global oil price would be much higher.”
The price increase of oil can be seen at the gas pump, where almost every day a few cents are added to the liter price. At the most expensive gas stations along the highway, a liter of petrol now costs 2.45 euros.
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