Energy giant Shell says the world doesn’t have a system to track Russian oil refined abroad. This could weaken sanctions.

  • “There is no system in the world that can trace the origin of Russian oil that is processed outside of Russia,” said Shell’s CEO.
  • This means that products such as diesel or jet fuel refined from Russian crude elsewhere can bypass sanctions.
  • Earlier this week, the European Union proposed a ban on Russian oil imports.

The European Union (EU) plans to ban Russian oil, and many other countries are also avoiding Russian energy products. But in reality it’s not that simple.

Shell’s chief executive Ben van Beurden said Thursday that this is because it is impossible to identify the origin of any crude oil, including Russia, if it is refined elsewhere and resold as a product in the country.

“At that point, we don’t have a system in the world that can track whether a particular molecule originated from a geological formation in Russia,” he said. Quarterly earnings call. “It doesn’t exist,” he added.

Van Beurden’s remarks underscore the difficulty of enforcing sanctions on Russian oil due to the complexity of global supply chains.

The European Union proposed a ban on Russian oil imports this week as part of its sixth round of sanctions against Russia’s invasion of Ukraine. This measure applies to fuels such as diesel and jet fuel coming directly from Russia, but not to products refined from Russian crude elsewhere.

“So diesel from an Indian refinery supplied with Russian crude is considered Indian diesel,” said van Beurden.

“So it’s very difficult to pinpoint whether it’s from Russia or not,” he said.

He said Shell does not refining products that use Russian oil.

Shell, the world’s largest oil trader, does not do business with Russian counterparts and does not currently buy any materials from Russia on the spot market, he said. The company also plans to end its long-term Russian contract by the end of this year.

energy giant Up to $5 billion in amortization Assets after withdrawal from the Russian oil and gas sector.

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