Shell announced Tuesday it would immediately stop purchasing Russian crude oil and would shutter its service stations in the country in response to the Russian invasion of Ukraine, on the same day the price for U.S. gasoline hit a record high.
The U.K.-based company’s decision comes as the U.S. national average price for regular gas hit $4.173 a gallon on Tuesday, surging past the previous record of $4.114 set in July 2008, according to AAA.
Shell said it plans to immediately end purchases of Russian crude oil on the spot market and not renew contracts, unless given other direction from governments. The company said it would shift its supply chain to excise Russian crude completely.
Shell said the move, which follows a decision last week to dump its investments in Russia, is “aligned with new government guidance.”
“We will do this as fast as possible, but the physical location and availability of alternatives mean this could take weeks to complete and will lead to reduced throughput at some of our refineries,” Shell said in a statement.
The company will also start shuttering its service stations, aviation fuels and lubricants operations in Russia while kickstarting a phased withdrawal from Russian petroleum products, pipeline gas and liquified natural gas.
Shell CEO Ben Van Beurden apologized for the company’s purchase of a cargo of Russian crude for refining into gas and diesel last week.
“We are acutely aware that our decision… despite being made with security of supplies at the forefront of our thinking — was not the right one and we are sorry,” he said.
The company pledged to donate profits from the remaining barrels of Russian oil it processes to a fund to help the people of Ukraine.
In nearly two weeks since Russia first invaded Ukraine, Russia has been hit with a number of sanctions by the West. However, its energy exports have thus far been excluded from the sanctions, though U.S. officials are discussing banning imports, according to CNN.
The Kremlin on Monday threatened to cut supplies of natural gas to Germany in response to its decision to end Russia’s Nord Stream 2 pipeline project. Russia warned that oil prices could hit $300 a barrel if the West bans Russian oil.
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