Shell Says It’s Impossible to Achieve Total Oil Ban on Russia

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On the heels of EU’s plan for a comprehensive boycott of Russia oil by members of the bloc, Dutch oil giant, Shell has said that there is no way to trace whether there is Russian crude oil or how much crude from Russia will go into the refined products market globally.

Speaking yesterday as EU unveiled its sixth tranche of sanctions against Russia, Shell’s chief executive, Ben van Beurden said global oil system does have systems in the world that trace back whether that particular molecule originated from a geological formation of a particular country.

“So therefore, diesel coming out of an Indian refinery that was fed with Russian crude is considered to be Indian diesel,” Reuters quoted the Shell’s boss.

He said it is a big challenge to try to achieve a comprehensive oil ban on Russia’s oil movement sanction the warring Russia. “It is the challenge the West faces in truly banning Russian oil from the market.”

The U.S. has already banned imports of Russian energy products, including crude, refined products, and liquefied natural gas (LNG). In Europe, the European Commission on Wednesday officially proposed a full ban on Russian crude and oil product imports by the end of the year.

“We now propose a ban on Russian oil. This will be a complete import ban on all Russian oil, seaborne and pipeline, crude and refined,” European Commission President Ursula von der Leyen said at the European Parliament on Wednesday.

Going by van Beurden’s argument, if Europe imports diesel from India, it still may have been processed from Russian crude which India is not shying away from buying, especially if Russia offers steep discounts for its grades.

Shell, the top trader of oil in the world, bought a Russian crude cargo in the early days of the Russian invasion of Ukraine. Following a backlash over the ethics of continuing trade with Russian oil, Shell apologized a few days later for buying Russian crude.

The international oil company went on to announce its intention to withdraw from its involvement in all Russian hydrocarbons, including crude oil, petroleum products, gas and LNG in a phased manner, aligned with new government guidance.

“As an immediate first step, the company will stop all spot purchases of Russian crude oil. It will also shut its service stations, aviation fuels and lubricants operations in Russia,” Shell was quoted as haven said in March.

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