Shell stands to make $20mn from contentious Russian oil trade

Shell stands to make $20mn from contentious Russian oil trade

Shell stands to make a $20mn profit from a cheap cargo of Russian crude it bought just days after the oil major announced it was pulling back from the country following its invasion of Ukraine.

When the London-listed company revealed on Monday plans to exit its joint venture in Russia, its chief executive Ben van Beurden said he was shocked by the loss of life in Ukraine, resulting from a “senseless act” of military aggressive, which “threatens European security”.

“Our decision to exit is one we take with conviction,” he said. “We cannot — and we will not — stand by.”

Yet on Friday, Shell’s powerful trading arm bought 725,000 barrels of Urals, Russian flagship crude, from commodity trader Trafigura at a record discount of $28.50 to Brent, the global oil benchmark, on a delivered basis.

The trade was the first deal completed in a public trading window run by S&P Global Platts since Russia invaded Ukraine and traders said it would make Shell about $20mn when the oil is put through its refining system and then sold to consumers.

“I am astonished that Shell lifted this cargo,” said one senior trader.

Trafigura, which is contractually obliged to lift roughly seven to eight cargoes of Urals