Iran Press/ Europe: TotalEnergies said on Tuesday that it would stop buying Russian oil by the end of the year and halt further investment in projects in the country.
The move is expected to raise oil prices even further as the prices jumped even higher on Monday after Russia-Ukraine talks appeared to yield no sign of progress, and markets continued to fret over tight supply — sparking a call by the International Energy Agency to reduce oil demand.
Crude futures were up more than 3% on Monday morning during Asia trading — international benchmark Brent crude was at $111.46, and US futures at $108.25.
At the same time, TotalEnergies warned of the risks and potential negative consequences — for itself and Europe — of a headlong flight from Russia in the wake of the Russia-Ukraine conflict, The New York Times reported.
The Paris-based company said it had “initiated the gradual suspension of its activities in Russia, while assuring its teams’ safety.” TotalEnergies had said on March 1 that it would halt new Russian investment.
Tuesday’s announcement expanded on that initial statement, describing how the company would no longer enter into or renew contracts to purchase Russian oil and petroleum products, and saying that would it would halt all such purchases by the end of this year. TotalEnergies also said it would stop providing capital for new projects in Russia, including a large planned liquefied natural gas installation called Arctic LNG 2.
The energy company’s actions since the Russian operation in Ukraine illustrate the challenges for European businesses and policymakers. Europe is dependent on energy from Russia, which is one of the world’s largest suppliers of oil and gas.
TotalEnergies itself is in a difficult position. The company said in its statement on Tuesday that it had been accused of “complicity in war crimes” for continuing to work in Russia. At the same time, its Russian business, especially liquefied natural gas investments, has been an important part of the company’s future strategy and something it has been reluctant to completely renounce.
Buying energy from Russia is also an established practice that will be difficult to abandon. TotalEnergies appears to have been one of the larger buyers of shiploads of Russian crude in 2021, averaging 186,000 barrels a day, according to data from Kpler, a research firm.
TotalEnergies has contracts to import Russian oil that comes by pipeline to its Leuna refinery in eastern Germany. The company said that it would terminate these deals by the end of 2022 and substitute supplies brought through Poland.
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