Shell estimated to make hundreds of millions trading Russian gas since the Ukraine invasion
2 July 2023
On 8 March 2022, the oil and gas giant Shell was embarrassed. The horror of Russia’s full-scale invasion of Ukraine was clear yet the company had been caught trading cheap Russian oil. Shell’s then-CEO Ben van Beurden said sorry and promised to stop dealing in all Russian hydrocarbons: no oil, no petroleum products, no gas...
One week later, the tanker Grand Mereya set off from Russia’s immense gas field Sakhalin, which Shell helped set up. The boat’s cargo – 140,000 cubic meters of liquified gas (LNG) – was not initially sold by Shell, nor was it the final buyer. Instead, the company made money along the way, buying and selling the gas before it reached its final destination.
And despite Shell’s justifications for sticking with Russian gas, the Grand Mereya was not destined for Europe. It ended up in China.
Russia’s LNG exports are helping to finance the country’s war in Ukraine and in 2022 were worth an estimated $21 billion. Few companies have helped this trade more than Shell, and Global Witness estimates that Shell has made hundreds of millions trading Russian LNG last year.
Yet despite the war crimes this trade helps finance, it is legal. Shell, the UK, and the EU should immediately halt it.
Shell declined to comment when presented with Global Witness’ findings...
Analysing records from commodity trade data firm Kpler, Global Witness identified each LNG shipment that left Russia between March and December 2022, after Russia’s full-scale invasion of Ukraine. For each shipment, there were multiple traders: original sellers, final buyers, and companies that bought and sold the gas while it was at sea, likely making a profit along the way.
According to our calculations, between March and December 2022 Shell was critical to the trade of Russian LNG, buying and selling 12 percent of all exports, over 7.5 million cubic meters of the gas.
Three companies traded more Russian LNG than Shell, but two of them were Russian companies that likely produced much of the gas that was traded: OAO Yamal and Sakhalin Energy. All of the LNG Shell traded was bought either directly or indirectly from Yamal and Sakhalin. (Shell part-owns Sakhalin, although in March 2022 the company wrote off the project and believes the Kremlin has since transferred Sakhalin’s assets to a new company it does not own.)
The third company that traded more than Shell was TotalEnergies, which part-owns Yamal, although the company wrote off its investment in December 2022. A large portion of Shell’s LNG that originated with Yamal was traded earlier by Total.
In a statement addressing Russian oil and gas on Shell’s website, last updated April 2023, the company said it had "stopped spot purchases of Russian LNG but still has some long-term contractual commitments"...