Shell accused of using ‘accounting trick’ to keep buying Russian oil

The Ukrainian government has accused Shell of using an “accounting trick” to allow the oil giant to keep buying Russian crude despite promising to cut ties with the Kremlin.

A letter sent by Kyiv to Shell boss Ben van Beurden said it was “deplorable” that companies are continuing to “bankroll Putin’s war machine” amid concerns Russian oil is still being bought through backdoor routes.

The FTSE 100 oil major committed to stop purchasing Russian crude in the spot market and said it is legally obliged to accept oil deliveries from contracts sealed before the invasion of Ukraine. However, it defines refined oil products, such as diesel, as not being of Russian origin if less than 50pc of the blend is from the country.

The letter blasted Shell’s strategy, saying that “the notion that any company will continue to bankroll Putin’s war machine through an accounting trick is deplorable”, according to the Wall Street Journal.

“It’s a national shame for many governments and institutions that are financing these aggressions towards us,” said Oleg Ustenko, an adviser to Ukrainian president Volodymyr Zelenskyy.

There are concerns that Russian oil is still reaching the market through opaque methods used by other sanctioned countries, such as Iran and Venezuela. Experts have spotted an increasing number of tankers labelled “destination unknown” and fear this oil is then being offloaded on to other ships at sea.

A spokesman for Shell said: “Since Shell announced its plan to withdraw from Russian hydrocarbons on March 8, we have not bought products exported from Russia for blending to be sold on as ‘non-Russian.’

“We have stopped all spot purchases of Russian crude and LNG, and eliminated the vast majority of spot purchases of refined products that may contain a proportion of Russian fuel that was blended in further up the supply chain. Our priority is to continue to reduce all of these volumes as quickly as possible.”

Shell said earlier this month it is taking a hit of up to $5bn (£3.9bn) from ditching its Russian assets as part of its plan to exit the country.

The company was criticised for buying Russian oil at a cut price when the war began before quickly U-turning and apologising.

The EU is considering a plan to phase out Russian oil imports in order to squeeze the Kremlin, which is heavily reliant on revenues from its hydrocarbons industry. It would be following the lead of the UK and US after they announced an oil embargo last month.

The spokesman for Shell added: “Our self-imposed restrictive measures go far beyond any European Union measures in place today. All our activities around the world are carried out in full compliance with sanctions, applicable laws and regulations of the countries in which we operate.”

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