Shell stops buying Russian crude as Moscow's isolation deepens
Shell (SHEL.L) stopped buying oil from Russia and said it would cut links to the country entirely on Tuesday, as Moscow's economic isolation looked set to dramatically escalate with the United States expected to impose a ban on its oil imports.
The West's moves to punish Russia for invading Ukraine have turbocharged global commodity and energy markets, sending prices soaring and threatening to derail the nascent recovery from the coronavirus pandemic.
The London Metal Exchange halted trade in nickel on Tuesday after prices of the metal, a key ingredient in electric vehicle batteries, doubled to over $100,000 a tonne in a matter of hours.
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Shell's decision to leave Russia comes days after it faced a hail of criticism for buying Russian crude – a transaction that two weeks ago would have been routine - underscoring how Russia's pariah status is growing even in a market it used to dominate.
"We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking - was not the right one, and we are sorry," Chief Executive Ben van Beurden said.
Although no sanctions have yet forced such divestments, Shell and rivals BP and Exxon Mobil (XOM.N) have announced plans since the invasion to sell holdings in Russia and exit the country, leaving France's TotalEnergies relatively isolated in hanging onto its investments there.
Dozens of companies have shut down activity in Russia since its invasion of Ukraine, which Moscow has termed a "special military operation" aimed not at occupying territory but at destroying Ukraine's military capabilities.
German sportswear maker Adidas (ADSGn.DE), cosmetics firm Estee Lauder (EL.N), and Calvin Klein and Tommy Hilfiger owner PVH Corp (PVH.N) are among the latest brands to announce the suspension of activities there.
The conflict has roiled global stock markets as investors have worried about its economic fallout, putting in doubt market listings, including that of Malaysia's Top Glove Corp Bhd.
It has also driven a surge in commodity prices, which mining group BHP (BHP.AX) warned could spill over into already skyrocketing inflation and potentially affect global growth.
As well as high-grade nickel, the price of other metals used in car production, from aluminium in bodywork to palladium in catalytic converters, has soared, and industry supply chains have been broken.
Volkswagen said it would stop taking orders for numerous plug-in hybrid models from Wednesday, as supply chain troubles exacerbated the production delays caused by chip shortages.
The carmaker had already halted production in Russia, and has also suspended production at several factories in Germany as it has struggled to obtain components.
Orders for the plug-in hybrid versions of Volkswagen's Golf, Tiguan, Passat, Arteon, and Touareg models will be halted until further notice and delivery of already placed orders may not happen this year, the company said.
