Shell is said to continue purchasing Russian oil and gas

Shell Plc, Europe’s largest oil company, is continuing to purchase oil and gas from Russia in the wake of the country’s invasion of Ukraine, according to a person briefed on the matter.

The company is in discussion with governments and will comply with any changes in regulations, the person said. 

Those decisions may help calm an oil trading and shipping market that’s become anxious about touching Russian barrels for fear of a sanctions backlash following the invasion. The person didn’t go into details about specifics of purchases, such as whether it applies only to existing business or new trades as well.

While Shell said on Monday that it was exiting its assets in Russia—including its stake in the large Sakhalin-2 liquefied natural gas plant—the company is also a giant in oil and gas trading, handling about 12 million barrels a day of petroleum.

Separately, Spain’s largest natural gas company, Naturgy Energy Group SA, is also still buying fuel from Russia, according to a person familiar with the matter.

Madrid-based Naturgy signed a contract with Yamal LNG in 2013 to offload about 3 billion cubic meters of gas annually in Spain and elsewhere. Yamal LNG is operated by Russia’s Novatek PJSC, with TotalEnergies SE, CNPC and Silk Road Fund. Unlike it’s Big Oil peers BP Plc, Shell and ExxonMobil Corp., TotalEnergies hasn’t dumped its Russian operations and has instead said it will no longer provide capital for new projects in the country. 

Since the invasion, tanker owners have been wary of collecting Russian oil, causing freight costs to spike. Shell’s approach may bring some comfort to those shipping companies, who sometimes have relatively small compliance departments and take a caution-first approach.

Prices of Russia’s main export crude, Urals, have plummeted to record discounts to an international benchmark as traders increasingly shun the grade, and refineries race to secure alternative supplies from other markets. However, there are currently no sanctions in place preventing companies from purchasing crude, refined products and gas from Russia.