Earlier this morning, fuel supplier Shell made a statement that it will take a $5B hit following Russia exit.
Shell’s statement says their first-quarter reports for 2022 reveal this major financial loss. This is not as shocking as you may think.
According to the International Energy Agency, Russia is the world’s third-largest oil producer and second-largest crude oil exporter. Shell exiting Russia means the company no longer has access to the Nord Stream oil pipelines. This results in lost credits and contracts related to them.
Former criticism of Shell’s involvement with Russia
Shell faced criticism for its reluctance to fully disengage from Russian business after they invaded Ukraine. However, five days later, everything changed. They purchased Russian crude oil after stating it would be “limiting its business” with them.
On March 8, 2022, Shell followed up with the public announcement of full withdrawal of natural gas and oil obligations with Russia and closing all of its service stations within its borders. They aren’t the only fuel company taking this stance either.
Major fuel companies join the movement
This morning’s statement from Shell was continued with further commitment to remain out of Russia despite the financial loss.
“[Shell] has not renewed longer-term contracts for Russian oil, and will only do so under explicit government direction. but we are legally obliged to take delivery of crude bought before under contracts that were signed before the invasion.”
In addition to Shell’s Russia exit, other major fuel players have followed suit partially or entirely are BP and ExxonMobil. Even entire countries are starting to take action, such as Lithuania.
While these companies are losing money from these decisions, they are hitting Russia in two major ways. Number one, their wallets. Number two, through a strong political statement.
Your integrity will always be more important than money.
H/T: Business Insider
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